Thursday, February 04, 2010

'Not business friendly' Post #18 - raising Toledo's payroll income tax

It's been a while since I dedicated a post to the 'not business friendly' category but the latest from the Toledo Mayor's office certainly qualifies.

Toledo is facing a huge budget deficit. The amount seems to vary daily ($38-44 million), but let's just pick an even number in the middle and call it $40 million.

The reason we have a deficit is because the city spends more than it takes in. (DUH!) They blame revenues that didn't meet projections. I blame the individuals who projected revenues greater than were logical.

One of the biggest culprits in the mess is income tax collections - the payroll tax deducted from the paychecks of all Toledo residents (regardless of what city they work in) and all Toledo workers (regardless of where they live) - which are down significantly.

The solution being presented? Raise the payroll tax!

No, I'm not kidding! They have a decrease in both the number of people paying and in the amount collected from those who still are...and they want more! As if a temporary influx from raising the tax will somehow magically solve all the underlying problems that resulted in the decreased collections in the first place.

This is insanity! I can't say it any clearer.

If a company can give their employees an instant increase in pay by moving out of the City of Toledo, why wouldn't they consider it? If companies know that their employee compensation will be attacked by the local government, why would they want to come here?

On a national level, most people think the reason for deficits is because politicians spend too much - not that taxes aren't high enough. I'd wager that sentiment applies to local governments as well!

It's the tax-hiking, 'we've-cut-everywhere-we-can-there's-no-where-left-to-cut' type of thinking that got us into this mess in the first place. And the solution coming from Mayor Mike Bell's 'Citizens Special Investigation' task force is just more of the same - raise taxes. That's not 'out of the box' as the Mayor requested.

Oh, to be sure, the types of taxation they're suggesting (entertainment taxes) are a bit new - but they're still higher taxes. It's just more of the same failed philosophy that promotes the idea of government needing your money more than you do - and that's what got us into this mess in the first place.

But that's not the worst of it. Oh no!

The worst part is the hypocrisy of the elected officials when it comes to citizens paying more.

As a commissioner, I voted once to increase the amount of the dog license fee. The Dog Warden's operation was supposed to be self-sufficient and instead had been relying upon transfers from the County's general fund for meeting their budget. We had the department do some cuts and voted, 2-1, to raise the fee for the first time in years. Comm. Tina Skeldon-Wozniak voted against this saying that too many seniors relied upon dogs as companions in their old age and they might not be able to afford the extra $5 a year. But then Tina voted IN FAVOR of a new property tax that would have cost those very same seniors more than $5 a year!

It's contradictory - I know. But it's what passes for 'logic' in Toledo and Lucas County.

Why is this relevant? Because the same thing is going to happen in Toledo City Council.

Mayor Bell has drafted legislation to put an increase in the payroll income tax on the May ballot. It needs to be voted on by Council at their next meeting on Feb. 16th if it's going to make the May primary. The proposal is a 'temporary' increase of a quarter of a percent, raising the tax from the current 2.25% to 2.5%.

They say 'temporary' as they project it will expire in 2012. However, there is already .75% of the payroll tax that has been 'temporary' since the early much for the definition of 'temporary' in Toledo.

I have no doubt that a majority of council members will vote to put this on the ballot if it is presented to them. That's much easier than facing special interest groups packing council chambers to lobby for programs other than their own to be cut. They'll all get up and say how their program must continue and council should cut 'elsewhere.' But those groups are never asked by council what they'd do without in order to keep their funding...and if someone should challenge those groups on that point, their usual retort is 'that's council's job' to decide.

Which is why council will vote to increase taxes rather than upset all those special interests. Besides, they think they need your money more than you do. And they're hypocrites when it comes to your money.

Tuesday, council passed (with District 5 Councilman Tom Waniewski (R) as the sole 'no' vote) a resolution opposing two bills in the Ohio legislature. Amended Sub. Senate Bill 162 and House Bill 276 would allow phone companies in Ohio to raise monthly rates by $1.25 every year. Council suspended the rules requiring two readings of items before council and voted immediately - because they just couldn't wait to oppose what Columbus was considering.

In support of the resolution, At-Large Councilman George Sarantou (R) said the bills were "bad news for residential phone users." He said seniors and others who might not have any other type of phone service would be "severely affected" and that the bills were "absolutely very harmful."

Now, they're talking about $1.25 a month as being too much for Toledoans to be able to handle. Their resolution even states:

WHEREAS, historically, Toledo and Northwest Ohio residents have paid some of the highest utility costs in the state of Ohio and are challenged daily with uncertain economic conditions...(emphasis added)

But these same council members are going to ask for more money from you for THEIR purposes.

If you make $10 an hour and work a 40-hour week, you'll be paying $1 more per week if they raise the payroll tax.

They're going to tell Columbus not to pass an increase of $1.25 per month on to Toledo residents, but they're going to tell voters to pass an increase of $4 per month on those same individuals?

Can you say 'stuck on stupid'???

And they do this kind of crap all the time - telling others not to take pennies out of your right pocket while they take dollars out of your left.

Now, don't get me wrong. There may be other aspects of the phone bill legislation that would generate opposition, but the major selling point being used by the politicians is the monthly increase. They look like idiots when they, in effect, say that others can't rake your earnings over the coals - only they can.

They'll hide behind the whole 'I didn't raise the rate - voters did.' What a cop-out!

I'll predict right now that most, if not all, members of council will urge people to vote for the tax increase if it's on the ballot. You won't see them going out and telling people to vote no - that's for sure!

If they truly believe that Toledoans are having enough economic issues, they wouldn't even ask for the support of the voters. They'd just vote no to putting the measure on the ballot and begin the difficult job of reducing the size of Toledo's government.

But don't hold your breath.

The sad part of all this is that I doubt anyone is going to hold these council members accountable for their contradiction in saying $1.25 a month to the phone companies is too much but (an estimated) $4 a month to the city coffers is just fine.

And they wonder why we have declining numbers of businesses, declining population, the highest unemployment of all the urban areas in the state, record foreclosures, record bankruptcies, record numbers of people on public assistance, etc... etc... etc...

This is why. And both politicians and voters have refused to admit that the same failed philosophy of government that got us into the mess is not going to get us out.

1 comment:

Hooda Thunkit (Dave Zawodny) said...


Let's say that a "temporary" tax increase proves to be necessary; the timing of the announced intention is unfortunate.

Better it would have been announced AFTER the City had first:

Severely cut the needless spending,

Drastically cut back on the amount of bloated management that they are carrying,

Announced their plans for divesting the City of unused/excess property/assets,

And negotiated union contract concessions and staffing levels.

Then, the tax increase might have had a grudging chance of acceptance.

But, as we all know, the tax increase will have a negative effect on Toledo's population; it's just too easy to move away from the taxing, taxing, taxing and leave it for others to pay, pay, pay...

All things considered, the announcement and timing was ill conceived...

CSI committee = 0, taxpayers = 0...

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