By Sue Botos
City Council put a few more pieces to the budget puzzle in place at Monday’s legislative session by passing a pair of ordinances that call for a 0.5-percent income tax hike and the placement of the issue on the November ballot.
“We had the opportunity to look at this in many ways. This is an opportunity for us to stay level with what we had in the past as a city,” commented council President Jim Moran prior to the measures’ passage. He also pointed out that amendments had been made to the ordinances specifying that the funds from the tax increase would only be used for capital improvements projects and for debt services.
Moran added that the increase, which is expected to add about $2 million annually to city coffers, will replace the now-defunct estate tax. Discontinued by the state last year, the tax raised about the same amount for the city and was used for capital improvements.
“This is the most important piece of legislation we have presented,” said Councilman at Large Chris Klym. He added that the process of placing the issue on the ballot was a long one, taking well over a year of discussion and weighing of alternatives. “I say to the mayor and the administration that this is a courageous step. It’s important to put this to the voters. This is where we stand,” he added.
Klym also noted that during the more than six weeks of intensive discussion by council, and a detailed outline given by Mayor Pam Bobst at the June 3 council committee session, there has been no public input from residents. “That we have had no public comment is interesting,” stated Klym, adding that during informal discussion with residents, he has been questioned, but had received few negative comments.
Moran added that the next step will be for council to present the information to the pubic, making sure residents have all of the facts before they head to the polls in November.
“No one wants to pay more for taxes, but I will support this,” commented Councilman at Large Dave Furry, who noted that he lives and works in the city.
According to figures presented by finance Director Mike Thomas, residents who work in the city will see the biggest increase in taxes. Based on a $50,000 salary, these homeowners will pay an additional $250 in income tax. Because of an accompanying 0.5 percent adjustment in tax credit, residents working in another municipality will pay about the same. Any increase will come from the city in which they are employed.
Ward 1 Councilman Tom Hunt said that while it is “easy to be cynical or skeptical” when it comes to a tax increase, the bigger picture, particularly EPA mandates, must be considered. “The EPA mandates are not going away. We need to replace those funds,” he noted.
In her June 3 presentation, Bobst had noted that growing infrastructure needs continue and EPA mandates have totaled an estimated cost of $70 million to $80 million.
Ward 4 Councilman John Shepherd recalled that since 2008, the city has been making cuts to programs such as recreation and has reduced staff in several departments; however, a major influx of funds was needed to keep city services up to their current level.
“This council has been tested like no other. We’re being very strategic,” commented Bobst, adding that is was difficult to replace the $3 million that is being taken away by state cuts. “We will make sure we do as we have said and define (these funds) only for capital improvements.” Noting that there has not been a tax increase since 1977, Bobst added, “The time has come.”