She agreed that the 1% tax credit reduction should “fill the hole” for the next two years.
“The thing is, the reduction, we will not see the majority of money until 2024,” Schifer warned. The coming fiscal year will be difficult.
Committee members decided against seeking a property tax to fund replacement of city emergency equipment, in part because they felt voters would be unlikely to approve both measures at the same time.
Myers said he wants to have a better idea of how much a levy would need to generate fully fund replacement costs before putting such a measure on the ballot.
“If we’re going to have the ask, the ask should be for what we need, not to get us kind of close to where we need to be,” he said.
Robert Taylor, 411 Plymouth St., warned committee members they need to consider how their actions are perceived by the community.
“I’m hearing tax, tax, tax; I’m not hearing cut, cut, cut,” he said. While he’d support both the credit reduction and the additional income tax, the city has to make a good case to voters.
“I get it; we’re in a tight spot,” he said. “But … the optics of it has to look good if you think you’re going to pass a levy. If the citizens look and the city’s not made any cuts to personnel — it’s looking like only the peasants out here are paying the price.”
The administration has made many cuts in recent years, Myers said.
“They’ve done away with a lot of the supervisor positions; they’ve really whittled their staff down,” he said. But at its meeting on Dec. 16, the committee will be looking for additional cuts.
Why is the city experiencing financial stress?
Multiple factors have combined to create the financial stress the city is now experiencing, both Mayor Jeff Reser and Schifer have said previously. Population has been dropping. Citizens are aging, and retirees do not pay income tax. Many residents work outside the city, and pay their income taxes elsewhere. Changes in state law also have reduced city revenue.
This year, GE Lighting, a Savant Company, closed its plant in Bucyrus; withholding for that employer was roughly $300,000, Reser has said — roughly 4% of the city’s income tax revenue base.
At the same time, the city is dealing with the same inflationary pressures as everyone else.
Then this week, three city council members voted to accept a fact-finder’s report on the union contract with city firefighters. Reser has said the new contract, which includes pay raises retroactive to the first of the year, will cost the city $327,855 in 2022 alone.
“It’s a $300,000 hit to the city budget at a time we don’t have the money,” Reser said. “We’re struggling right now. … It’s going to be a financial hardship to be able to find the money and balance the budget.”
Mayor issued recommendations this week
At a meeting last week, Reser recommended that the finance committee reduce the income tax credit by 1%, at least temporarily; and ask voters to approve both a 0.25% income tax increase and a property tax.
After the fact-finder’s report was accepted on Tuesday, Reser issued a written version of his recommendations that called for significantly more drastic actions.
In the report, he called for reducing the income tax credit to zero and requesting a 0.55-mill property tax levy for police and fire equipment. He said he believed reducing the income tax credit would be a more equitable solution than a new income tax.
Reser also recommended council members consider using the Regional Income Tax Authority for income tax collection.
Schifer spoke out against such a move during Thursday’s meeting, questioning whether such a switch would significantly increase local collections. Instead, the city should create an income tax appeals board, she recommended. “I think we need to give that a chance,” she said.
Committee members indicated they favor her plan but would wait to take action until they have identified who will be on the board.
ggoble@gannett.com
419-559-7263
