Northwood City Council recently rejected an ordinance that would have removed a proposed municipal income tax increase from the November 2 ballot.
Council had previously approved placing a .25 percent city income tax increase for three years on the ballot, which would bump up the income tax rate from 1.5 percent to 1.75 percent if approved. Weeks later, Councilman Ed Schimmel had asked the city’s attorney to prepare legislation that would remove the proposal from the ballot.
At a recent meeting, council, by a vote of 5-2, defeated the measure. Schimmel and Council President James Barton voted to remove the proposal from the ballot.
“We do need this levy,” said Councilman Mike Myers. “The people have the right to go out and vote yes or no. Give people the opportunity to vote for it. If they turn it down, they turn it down.”
Councilman Dave Gallaher agreed.
“If the income tax is taken off the ballot, or if the income tax is left on the ballot and not approved [by voters], then the option would be to keep cutting personnel until we get to the point where we can’t…operate as a city anymore. To me, that’s not an option. That’s more like giving up and throwing your hands in the air. We should be looking at moving this city forward. To do that, we’re going to have to turn the tide and do something. I think we owe it to the residents to let them know how important this is, and give them the opportunity to support the city.”
Council has made deep budget cuts and layoffs in the last two years as a result of the economic recession.
Raising the income tax rate is one of three options council considered as a way to counter further budget cuts and layoffs if city revenue continues to drop. Charging residents a monthly refuse collection fee of $10, and reducing the tax credit to residents who work outside Northwood, were later rejected by council.
Gallaher said that Barton, as an opponent of the proposed income tax hike, refuse collection fee and tax credit reduction, has not offered any options to improve the city’s financial situation.
“I know you do not support this income tax. But you have yet, as council president, to show us that we can live without it. If you’re going to go on record as not supporting this, then I think you owe it to the people to show how we’re going to get through this,” said Gallaher.
“When times were good, and we had growth, we probably spent some things that we really didn’t need to spend, and we didn’t save like we should have,” said Barton. “I just feel that you grow revenue through growth. And when the economy gets better, we’ll get better. If our residents are suffering, we’re going to be suffering with them.”
Schimmel said that city income tax collections have increased recently and that a tax increase is not needed.
“We are actually up .7 percent from August of 2009. I don’t recall a time this year when the numbers have gone up then gone back down. They’ve been consistent and we’ve been improving. I don’t see a dire emergency where the city’s going to fold if we don’t do an income tax hike, or a trash fee hike, or a reduction in the tax credit,” said Schimmel.
“I think we need to leave it on the ballot,” said Councilwoman Connie Hughes, “and let the voters tell us what they want.”
Mayor Mark Stoner said he supports the proposed income tax increase because the city can’t cut any more services without a severe impact on residents.
“When things were good, everybody in the city profited. We took care of the employees and the streets,” said Stoner. “Everything was good. Nobody here, I believe, saw this happening, or we would have tried to prepare better. The last thing that I want to do is raise taxes. I’ve always been pretty consistent with that. That being said, I have made a lot of cuts this year and last year. I heard most of you say that you want the people to decide, and I agree with that. Whatever the voters decide is going to be fine with me. We’re going to live by what they tell us they want us to do.”
If council had removed the proposed income tax hike from the ballot, or if voters defeat the measure in November, there would be another drop in city services, said Stoner.
“The residents need to know how they would be affected if things continue to decline,” said Stoner.
In the police department, the current staffing at 17 police officers is at a 20 year low, he said.
“That is equal to late 1980s staffing. I don’t think crime is down. So do we cut more police?” asked Stoner.
“Another option potentially would be to close the fire station. We’ll have to balance the budget somehow, some way. Are you guys willing to go on with those cuts?” The city currently has six full-time and one seasonal employee in the street department, Stoner continued. “In 2000, we had 9 full-time and two seasonal. Again, in 10 years, we’ve had more houses, more streets to take care of. We’re doing it with less people. What are you willing to put up with?”
Other options include closing some parks, and limited preparation of ball diamonds.
“We’re not going to have the personnel to do that,” said Stoner.
The city would also discontinue mowing vacant, overgrown lots and limit mowing in the right-of-way.
In addition, side streets would get less salt in the winter, he said, and there would be no road improvements.
“These are some of the cuts we’ll have to make,” said Stoner. “I just want to let you know, too, we’re almost to the end of the rope here inside the building as far as court, tax, finance, and zoning. A lot of these departments are departments of just one now. Let’s say you close the zoning department. We would have no permits being issued. We can’t have the board of zoning appeals and planning commission. What does that do to economic development? So are you willing to go along with decreasing safety and service? If voters vote it down, we’ll have to make cuts that are needed, and these will be just some of them until we make up the shortfall.”
Stoner said if voters approve the tax increase, and the economy improves, council can rebate the tax increase until the measure expires.
“We’ll still be collecting it, but we can pass an ordinance and rebate the increase to people,” he said.