Tuesday, August 11, 2009

Carty is right when it comes to Issue 1

Issue 1, to change the allocation of the city of Toledo's 3/4% payroll income tax, is on the primary ballot September 15. Mayor Carty Finkbeiner has announced his opposition to it.

Currently, this tax is split:

* 1/3 for Police, Fire and Safety Department responsibilities
* 1/3 for the General Fund
* 1/3 for the Capital Improvement Fund.

Voters approved this change in allocation in 2008 beginning with collections in 2009.

The allocation prior to the 2008 vote was:

* 1/3 for Police Fire and Safety Department
* 1/2 for the General Fund
* 1/6 for the Capital Improvement Fund

As I wrote at the time,

Since the tax generates about $57.7 million per year, that means:
* $19 million to police/fire/other safety department responsibilities
* $28.75 million to the General Fund
* $9.6 million to the Capital Improvement Fund

But the 2008 vote changed the allocation to equal thirds of the tax and, as a result, changed the dollar amounts to roughly $19 million each.

All members of city council and the mayor supported the passage of this change. But as I questioned at the time:

Now, it should be easy to see that with the CIP getting more money, the general fund (including police/fire/other safety department responsibilities) gets less - $9.75 million less, to be exact.

So, despite the claim by Council President Mark Sobczak that "(i)t'll be business as usual...", it really won't be if the general fund has to go without approximately $10 million starting in January.

So where will roughly $10 million in cuts come from? Inquiring minds want to know.

That question was never answered and the change in allocation is being blamed for part of the budget deficit.

So now, we're back to the beginning - sort of - with the Issue 1 language which will again change the allocation:

* For 2009, 1/2 to Police and Fire and 1/2 to the General Fund - nothing for the Capital Improvements Budget (CIP).

* For 2010-12, the term of the temporary tax, 1/2 for Police and Fire, 1/3 for the General Fund and 1/6 for Capital Improvements.

So before we've even gone a full year with the new allocation, they want to change it again.

One of the problems is that city council has already raided the 2009 CIP fund to balance the 2008 budget. They're also talking about raiding the 2010 CIP budget to balance 2009, which is still around $8 million in the hole. Even if voters approve this new allocation, it will not be enough to balance the 2009 budget.

If we keep raiding our capital budget, we won't have any money for structural items like roads, which are a major expenditure out of that fund.

Additionally, I'm tired of city council changing the allocation of this TEMPORARY addition to our payroll taxes. It was originally presented in 1982, the year I graduated from high school, as a temporary tax, but the city relies upon it as a permanent source of revenue. They've continued to spend as if they will always have this income - and the voters have continued to vote in favor of renewal because they're told doom and gloom will result if they don't.

Why did city council want to change the allocation in 2008? They wanted to put more money toward the CIP and they used that idea - and road improvements - as a reason for Toledoans to vote for it. Now, they've decided they want the money for their own pet projects in the General Fund, so they want to again raid the future (CIP) for the present (General Fund). Of course, the ever-present appeal to fear that they need the funds for police and fire, will be utilized.

Well, if they stopped funding all the non-mandatory items, perhaps they'd actually have the funds for the essentials - like police and fire. It's what we do with our own budgets but something government, and Toledo in particular, seems to not understand.

I mean, really, do we need to spend $150,000 on a study about a solar field on the landfill - or money for police and fire? That is the question council should be asking - but they don't. They spend money on such 'studies' while then telling the voters they've cut everywhere they possibly can and there just isn't any money left.

Yeah, right.

I wish the voters would tell council no on Issue 1. Not because I don't want more of those dollars allocated to police and fire, but because council needs to be sent a strong message that they can't just keep moving money around to suit their needs. This ballot measure robs Peter to pay Paul - and costs us more in the long-term than the temporary change will gain us for 2009.

City Council and the Mayor need to learn to live within their means - actually, to live within OUR means - and to make better decisions, not play a constant shell game with our tax dollars.


Hooda Thunkit (Dave Zawodny) said...

"City Council and the Mayor need to learn to live within their means - actually, to live within OUR (emphasis mine) means - and to make better decisions, not play a constant shell game with our tax dollars."

ON this you are exactly right, but the REAL fault lies with "We the Sheeple," because we put these characters in office.

If/When we learn to elect responsible people who understand what is mandated and can prioritize OUR spending properly, it will continue us to bind their hands, just a little, until we are comfortable with their performance.

In reality, it's Us and they, that need some sort of financial curbs on their power.

DeeDee Liedel said...

Maggie - what was the 3/4% income tax allocation prior to 2004? I recall being in a LCRP meeting back in 2004 where we were discussing endorsing the renewal and if I recall correctly, it was explained that the allocation on that renewal was changing because they were in a cash crunch and wanted to shift some money from capital and needed to change the allocation portions. Wasn't the income tax on the ballot a year early just to accommodate this?

It was explained that although the renewal said only 1/6 was going to go to capital, that they anticipated only doing the 1/6 for the first year, and going back to the 1/3 capital that was the then current allocation; they 'needed' this temporary adjustment.

(I remember this discussion although I may have the year wrong because there were a few of us who questioned WHY the Republican party was endorsing a tax, but one of our incumbent candidates was really pushing/supporting it and it was deemed to be harmful to the candidate if the party didn't back him/her up).

roman said...

Only in Toledo can the politicians define "Temporary" as permanent. I said to many that if the 3/4% tax passes and the people continue to leave Toledo that there will not be enough income to take care of the 'covered' services let alone the extra expenses that seem to pop up, that either the mayor or council will try to increase the temp tax to 1% but many thought I was crazy and that will never happen. Trust me on this one folks - we will be paying that 1% soon. I will vote against it but the many other lemmings will continue to vote blindly.

Maggie Thurber said...

DeeDee - I remember that conversation and thought it absolutely insane to support a tax simply because one of our endorsed candidates had...

Prior to 2004, the tax was split evenly 1/3, 1/3, 1/3. Here is The Blade editorial from October 2004 opposing the change in allocation:


THE city of Toledo is in fiscal trouble, no doubt about it, but that's not a compelling enough reason to divert money from street paving and other capital improvements projects, especially if the diversion is intended to help meet payroll .

Accordingly, we urge a vote of NO on Issue 5 on the Nov. 2 city election ballot.

Approval of Issue 5 would allow Mayor Jack Ford and City Council to use more of the 0.75 percent city income tax surcharge to pay salaries and other general fund expenses. However, we have a problem with any plan that would postpone or cancel infrastructure projects in order to line the pockets of unionized city employees.

Defeat of Issue 5 would not cancel the 3/4 percent surcharge, just preserve the status quo.

The surcharge, in effect since 1982 and renewable every four years in a public vote , does not expire until the end of 2005, but city officials are seeking early renewal and a change in the distribution of revenue.

If the issue is defeated, the surcharge would continue through 2005 with the proceeds spent at current proportions.

At present, one third of the surcharge revenue goes for police and fire services; one third to capital improvements, and one third to the city's general fund. Approval of Issue 5 would cut the capital improvements share by half, allowing the city to move up to $8.75 million into the general fund to help offset an expected $14 million budget deficit.

Mayor Ford and council members say they won't move the entire $8.75 million but expect to use only $4 million. But we know where it eventually would go: higher pay to sate the voracious appetite of the public employee unions.

That would be unfair to taxpayers, especially those suburbanites who pay Toledo's 2.25 percent income tax because they work in the city.

With Toledo at a near stagnant growth rate, a case can be made that the city no longer needs the same number of workers it once did. The police manning formula, for example, was set when the population was in the neighborhood of 365,000. Now it's about 313,000.

So if the city needs to make cuts, why not try layoffs? We're not eager for anyone on the payroll to lose a job, but other Ohio cities have bitten this bullet. Why not Toledo?

This city has been led down the garden path before by the unions, which demanded and got generous pay raises. That's why the treasury is bare now, and pothole-filled streets are the norm.

Like the 3/4 percent "temporary" tax itself, we worry that this redistribution could become permanent, or at least very difficult to undo.

A balanced budget is City Hall's responsibility. If layoffs are a better way to achieve it than letting the city's infrastructure deteriorate, layoffs must be considered.

Toledoans should stand up to this diversion and vote NO on ISSUE 5.

Hooda Thunkit (Dave Zawodny) said...

Maybe a more realistic answer would be to give the areas of Toledo the option of annexing to their non Toledo neighbors then.

I for one would pay the higher water and sewer rates to be able to divest myself of the all of the Toledo BS, and deal with a more reasonable/rational local government, run by politicians who grasp the relationship between excessive taxes and regulation, and encouraging businesses to flourish ;-)

Of course, from my location, Monclova is also another possibility :-)

But IF, and that's a very big if, Toledo were to ever smarten up (fat chance) and cut that "temporary/permanent" tax back by, soy 1/2% and clean up (no, I'm not going to repeat it, but you know what I'm thinking) their act and act like their neighbors...

But by then, pigs will surely be flying and we will have more immediate problems to deal with, like carrying big, heavy, strong umbrellas and carrying heavy duty car window scrapers in our cars.


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