With Miami University's announcement Wednesday that 216 employee positions are being eliminated, the city of Oxford faces a loss in the city budget due to reduced payroll taxes.
For any staff member who makes $50,000, the city will receive $875 in city income tax on average, according to Oxford's Finance Director Joe Newlin.
Although this number accounts for a large portion of the city's budget, Newlin said he believes the city will be able to handle the changes from the Miami staff cuts because the city generally brings in more than it spends.
"We have a lean budget," Newlin said. "We are very conscious of how we are spending at all times by minimizing our discretionary spending."
Newlin said the payroll tax is expected to decrease after June, leaving Oxford responsible for only half a year of payroll tax loss.
The city of Oxford cannot predict an estimated loss from payroll taxes because the university has only released the number of jobs being cut, not the specific incomes of those jobs. Newlin said the city is monitoring the situation but doesn't want to speculate how much money they may lose until more information is available.
Alan Kyger, Oxford's economic development director, said he also thinks the city will be able to recover from these payroll cuts.
"On a short term basis, the city can absorb the decrease in payroll," Kyger said. "In the long term, (the city of Oxford) must make adjustments."
The money lost in payroll taxes will be made up by excess revenue the city has accumulated and, as a last resort, the money will come from a carryover fund balance.
Newlin said he believes these measures will not be necessary.
"The cuts won't hit us until mid-year and we can absorb half a year of it," Newlin said. "We will then make adjustments to next year's budget when we have firm numbers in total payroll loss."
The city itself is making slight adjustments to brace for the changes, Kyger said.
"We have asked for all departments to be conservative and only request what they absolutely need," Kyger said.
Kyger said he predicts the first department affected by the payroll tax cuts will be the Oxford College Corner Clinic as well as the Oxford Family Resource Center. Both are resources for Oxford citizens struggling financially.
"I expect these facilities to see an increase in the number of people using their facilities," Kyger said. "They will see the effects quicker and more directly than the city budget. The same people who are getting laid off still need health care and still need to pay their bills."
The city will begin to feel the effects of the payroll cuts in a 12-month delay, leaving Oxford citizens to feel the financial burden first, Kyger said.
"The city is aware of the economic climate," Kyger said. "Newlin is monitoring our income and, throughout the year, we will track trends and make adjustments. This is simply good business practice, and our business is serving the citizens of Oxford the best way possible."
