Whether the city of New Castle breaks even financially this year may depend on whether revenue meets expectations.

Through the first half of the year, the city was just about on target spending-wise, but under projections on the revenue side, according to a report prepared by the city’s Act 47 coordinator. The report, covering Jan. 1 through June 30, was received by city officials two weeks ago.

New Castle was declared financially distressed under Act 47 last year by the state, which named a coordinator to develop a recovery plan for the city.

Wage tax revenue is a major concern because it appears to be falling short of the figure projected in the 2008 budget.

Beginning this year, as the Act 47 recovery plan went into effect, the wage tax was increased to 2.2 percent for residents and 2.1 percent for nonresidents. The previous rate was 1.6 percent for both residents and nonresidents.

The budget estimated $2.6 million in revenue, but a more recent projection suggests $2.1 million will be collected, according to Gordon Mann of Public Financial Management, part of the Act 47 team.

Making a revenue projection using two different rates is something new, he said.

“In a perfect world, you would have had information from the past,” Mann said.

Kathy Clark of Eckert Seamans, the other half of the Act 47 team, added that it’s “too soon to tell” how much of a shortfall there may be.

Another situation, one that currently has no answer, is the amount of wage tax collected for the pension fund and general fund. Through the first six months, the city has collected 52.7 percent of the amount budgeted for the pension fund, but only 35.7 percent of the figure projected for the general fund.

Acknowledging that the two figures should be closer than that, Mann said, “We have to follow up with the treasurer’s office on that.”

In light of the potential revenue shortfall, Mayor Anthony Mastrangelo said, “We’re trying to see where we can hold on discretionary spending — where I can cut back, where it won’t affect services.”

The city spent 51.5 percent, or $5.9 million of its $11.4 million general operating budget through the first six months. For most departments, spending is on target or less than budgeted.

One exception is overtime in the streets budget, a result of snow plowing after several storms last winter. The amount budgeted was $19,500, but the city spent $33,847 for the first half of the year.

Despite the dire projection on the income side, the city collected 49.7 percent of budgeted revenue through the first half.