Sharon Mayor Bob Lucas has turned over a proposed 2009 budget to council, which will tweak it and have final approval next month, but he’s already looking to the future.

The mayor is heading into the final year of his term — the last year the city will have a mayor, as the home rule charter calls for a hired city manager instead.

Several potential problems have Lucas worried about the city’s finances next year.

One issue is wage tax collections, he said. When the city collected them in-house, Lucas said they’d settle up with other municipalities at the end of the year after the books were done.

Lucas said Central Tax Bureau of Pennsylvania Inc., which has now handled the collections for a full calendar year, sends out money due to other communities immediately.

Because the city had to “settle up” for 2007 and 2008’s payments this year, collections were less than the mayor had budgeted, he said. He predicted revenues of $1.65 million and the city got about $735,000.

“There’s still a problem out there for next year. We don’t know how much,” Lucas said, adding that that’s why he has tried to be conservative on revenues in the 2009 budget.

Another problem for the city is that five sewer employees in the past have helped cut grass and plow streets. Next year they will no longer be city employees but will work for the sanitation authority. “I’m worried that after the first of the year, I’m going to be short five people to keep the streets clean,” Lucas said. “We’re still trying to tackle that issue.”

The high number of vacant lots and homes in the city is something else that needs to be addressed, Lucas said. “We have to work on bringing in people,” he said, mentioning that a failed development proposed for Hermitage would be welcomed in Sharon.

The city is facing a $200,000 shortfall if it no longer administers the sewer fund for the authority next year, Lucas said. Talks between the city and the authority are ongoing and the city may be able to do some business with them to cover part of that shortfall, he said.

“Maybe we can strike a deal … but it’s too early to speak on,” Lucas said. Contracts with the fire department and the Association of Federal, School, County and Municipal Employees are up Dec. 31. Lucas said council has been given a tentative contract with the fire department and one is about ready for the AFSCME workers.

The city is still negotiating with the police department to make changes to their contract so that it’s in line with state pension regulations. Right now there is a hiring freeze because of the legal snag and the police department is short four people.

The home rule charter allows council to raise wage taxes beyond the state cap if it lowers real estate taxes to make the move revenue neutral. This is something Lucas said council should consider in the future.

Since the city needs money this year, it may have to raise real estate taxes. Lucas has proposed a 4-mill hike that would set them at 43.5 mills.

“My suggestion is, next year, raise the wage tax and lower the property taxes back down,” Lucas said.