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Press Release:
City Officials Ask Voters To Support Revenue Plan
Imploring voters to maintain core city services, Columbus city officials announced they will ask Columbus voters to support a 0.5 percent tax increase on the August ballot. Mayor Michael B. Coleman, all seven members of Columbus City Council, Chief of Police Walter Distelzweig, Chief of Fire Ned Pettus, City Auditor Hugh J. Dorrian and City Attorney Richard C. Pfeiffer said passage of the plan is essential in order to provide police, fire, health and other basic neighborhood services. The 0.5 percent increase is a key part of the city’s long-term plan to sustain the quality of life in Columbus through new jobs, government reforms and new revenue.
“In order to grow our economy and fight for jobs, we must have a safe and clean city and strong neighborhoods,” Mayor Coleman said. “If citizens support our three-point plan for jobs, reform and revenue, we can maintain our quality of life for many years to come.”
City Council will vote May 11 on a resolution to authorize the City of Columbus to submit an income tax increase to the voters in August, 2009. To go into effect, that resolution must be approved by the voters.
“The citizens of Columbus have a choice to make between maintaining core city services such as police and fire protection at the levels our residents have come to expect or experience drastic cuts,” said Council President Michael C. Mentel. “The declining national economy has forced us to find new sources of revenue to fund the basic services and economic development efforts that will help Columbus succeed in the coming years.”
Columbus city government has been making tough decisions for the last decade to keep its finances sound while maintaining safe and strong neighborhoods, cutting its civilian workforce by 30 percent, spending $67 million less than budgeted and cutting $155 million from what would have been business as usual since 2001. However, the Economic Advisory Committee assembled last year by the mayor and council has said the city must have new revenue. Most of a 0.5 percent increase of the city income tax would be paid by commuters who work in the city. This is the fairest way to shore up the city’s long-term finances, while keeping the city economically competitive. Those with high incomes would pay the most, those with low incomes would pay the least, and those with no incomes would pay nothing at all. For a middle-class Columbus household making $40,000 a year, the increase would cost less than $17 a month.
I’ll probably vote for this but I wonder how higher taxes will allow Columbus to attract new jobs when most other competitors its size have no city income tax at all (Austin, Nashville, Atlanta, Charlotte, etc…) and we are raising taxes? I’m not entirely sure, but I’m fairly certain that city income taxes is a a “Rustbelt” phenomenon. What happens if Columbus eliminates the city tax entirely? Everything shuts down? I did find this website that shows the small number of cities with income taxes and Ohio and PA seem to the be most “taxing”: http://www.taxfoundation.org/research/show/23363.html
Again, I’m willing to help Columbus with a small increase in taxes, but I really wish that Ohio cities, including Columbus, didn’t burden their citizens as much as they do. It can’t be good for competing to attract business– or residents on a macro scale.
@Kyle – not sure how i feel about the proposal. but wanted to check and see if these other cities have property taxes and separate school taxes? do they have taxes such as car taxes (Atlanta) or a higher sales tax rate (Austin = 8.25%, Nashville = 9%, Columbus only 6.75%). Are the taxes there, just labeled differently? it’s probably impossible to put together a complete apples for apples comparison, but I don’t know if the citizens of these other cities are netting more of their paychecks.
“those with low incomes would pay the least”
But they still would be paying it. What bugs me is that city income taxes are flat without any income exemptions. I don’t see why someone who is struggling to make it should owe the 2.0%.
It’s disappointing, I live in Boston and looking to move back to Columbus. There are no city taxes here, the state has a flat rate of 5.1%. Property taxes are comparable to less than Columbus. I don’t really get how a big city in the Northeast has state income, city income, and property taxes lower than a city in the middle of Ohio. There are no school based muni taxes either. The Tax Foundation often puts Ohio near the bottom of all states for taxation on its residents and having a confusing tax code, so this doesn’t help the state rank any better.
It is all relative Kyle, you know that. The things that matter are not just a % in which file, but quality of life, overall cost of living and safety.
At some point, every neighborhood public service has a price. What taxes can be levied by a “city” or municipal level of government is set by state law in Ohio. We are almost completely limited to the income tax, which hasn’t seen a rate increase since 1982. Before that it went up .5% about every 11 years since the late 40s, created by Republican Jim Rhodes and last raised by Republican Tom Moody, for the more partisan folks out there.
Some US cities have income, some have sales, some have property, some mix them, but overall the costs of police, fire, trash, etc. have got to be paid and cost similar amounts for major cities.
A better comparison might be cost of living, and from what I’ve seen, you can live on a $40k salary in Cbus for what the average American would need about $44k or more in bigger cities. Our overall tax load is comparable to other peer cities as well, but cost of living is lower, so we do not believe this is a major hit to economic development.
That said… the real threat to economic development (see how I decline to call it E.D.?)… is a drop in safety and quality of life and our ability to invest in infrastructure. All of those would decline drastically if we don’t address the gap we face in 2010 and beyond.
Just my take. I can send you some fun graphs tomorrow to show some of the places we did comps on.
mb
Mike, as I said, I will probably vote for this tax increase. I don’t want things to go to hell around here! I would, though, like to see those graphs. I’ve lived in Nashville, Chattanooga, and Knoxville where there are zero state taxes and zero city taxes but the sales tax was close to 10%. With that high of a sales tax, some argue that it affects the poor more because they have to buy food, clothing, etc. and rich people don’t “feel” the tax as much. But I will say that I didn’t notice when I paid 4% more for a hamburger than I do here. To me, it seemed like my tax burden was much, much less living in TN than OH and the services were about the same. And my parents can’t belive that I pay 4500 bucks in property taxes when they live on four acres and in a very nice house and pay 400 bucks a year. What gives? It’s probably because I a grew up as a hillbilly from the hillls in a place that can’t accept taxes but still gets by okay somehow. (How I really don’t understand.) What I’m accustomed to are places probably not in your comps. :)
But please rest assured that I am a proud Ohioan now and am willing to do my part to make it stay afloat. And I do realize that the state sets these things and do not want Columbus to decline. I’ll pay it.
The other shoe drops
Tuesday, April 28, 2009 2:59 AM
BY ROBERT VITALE
THE COLUMBUS DISPATCH
Columbus leaders put a price yesterday on protecting the city from a financial abyss: another $100 million a year.
The cost to you? Higher income taxes that would be the first local increase in 27 years.
With the current 2 percent tax rate, about 200 police officers and 200 firefighters could be cut from the payroll in 2010. More recreation centers would shut down. Weekly trash pickup might come with a fee.
But if taxpayers approve a 2.5 percent rate, the city would be able to avoid deeper cuts and might begin restoring police and fire classes, yard-waste pickup and other services.
READ MORE
Kyle my feelings are similar to yours. Normally I’d vote for this without much hesitation, except for the rise in my property taxes this year. You see, the county lists my house as uninhabitable trash that is subject to code enforcement, yet my taxes went up almost $500.00. I admit they’d gone up more had I pointed out that their audit was bogus, and the building is actually in better condition than when it was built. I also realize the city and county are two different entities, however as a taxpayer when I feel burned by one I don’t necessarily feel sympathetic to the other. Perhaps I’m narrow minded.
I’ll vote yes too, begrudgingly.
Why does the city need this much money to operate while most cities in the US do not have a city tax? Also, don’t tell me this is the first increase in 27 years. That is another misleading number. People’s income have gone up over 27 years. Each year your income goes up you pay more taxes (under the flat rate system). So in most years, the city gets more money each year and taxes on the population go up. In the same way property taxes have gone up each year.
.5% required to provide fire, police,infrastructure, etc. is a bunch of FUD. Fine, I’ll vote for the .5% if they then eliminate the 2%.
What the heck are they doing with all the money?
Saying that you are willing to pay extra to support the city is a red herring. The real question is what are they doing with the money they have now.
People have it tough right now, I’m not sure taking more away from them is a good idea.
While I think it is absolutely ridiculous that the Dispatch to the route of putting “25% income tax increase” on the front of their paper, I can’t help but not like this increase, and I’m normally someone who is ok with these types of things.
As for the city tax in general, I’ve never seen one before. However, Sales Tax in Seattle was 9.2% and I’ve paid 200 bucks for tabs on my car. So do with that what you will.
Is this being asked for under the assumption that stimulus money is not forthcoming?
While I may well end up voting for it, it’s probably fair to note that it’s easy to assume that this indicates that city government isn’t willing to allow itself to feel the recession in the same way those outside of it do.
Maybe if people would stop contributing to sprawl, then the tax coffers would not be as burdened or sucked dry. Suburban sprawl, in its current form, is unsustainable and CANNOT pay for itself. The city needs to stop annexing land and start rebuilding the brownfields into more dense neighborhoods. (The more dense an area is, the more taxes are produced from it) A potholed road in the central city will get passed up so that a road built 5 years ago in the burbs can be widened to 5 lanes to handle the increased traffic. The same goes for police, fire, sewer, schools. Why do you think a ridiculous amount of schools have trailers in their playgrounds. It’s sad and it needs to stop. I’m not saying this is the only reason for the cities budget woes, but you cannot convince me otherwise that it’s not a major reason why.
After reading several comments from the Dispatch article yesterday on the tax hike, I realize just how much educating our populace needs on the advantages of urban living and having a healthy downtown. Some comments were completely irrational and ignorant. It’s as though some feel the revitalization of our urban core is futile and unnecessary. Maybe we should start having public urban living forums similar to that of the Citizen Summit a couple of years ago. James Howard Kunstler could be a guest speaker. That would be awesome.
Anyways, I vote YES for the tax hike, even though I don’t like tax hikes. Let’s face it, times are tough. I love this city and I’ll gladly pay the extra few bucks for my city services (as long as the money is being used the right way)
download the city budget (available online somewhere, I know i’ve seen it a while ago) and look at the numbers.
now compare those numbers to other comparable cities with comparable population and area. Are those expenses higher or lower? Do those cities have other sources of income?
I think you might find that cities with lower income tax rates make up for it in other ways and end up spending comparable amounts of money.
it mostly comes down to the old “income tax vs sales tax vs property tax vs state income tax” argument.
FYI, the governor’s proposed state budget cuts funding for county and local governments, though the budget is nowhere near being completed. This could be an effort to fill that gap.
I honestly cannot believe that people who work for a living would voluntarily vote to take home now even less of their hard earned money. This is not a “little less,” but $200 a year out of your pocket for the average earner making 40k. I’ve got a plan – for everyone that is considering to vote yes, just cut me a check for $200 and I will make sure to put it right back in the Columbus economy. Think of the benefits! Figure it out Coleman. On the contrary, I’d like to see a proposal to decrease taxes to spur business growth.
Drew you make an interesting point about the city not feeling pain the way the rest of us do. I made the same point to someone the other day after reading the fine print on a city water bill. It said something to the affect of being due in 2 weeks or a 10% late charge would start hitting. It amazes me that the government gets all over credit card companies for equally nasty tactics while cities do it every day via utility billing.
Drew, I think the city needs to beef up services in a time of recession – crime will go up, so we need more police. More houses will sit vacant, so we will need more firefighters. Fewer people will be able to afford health insurance, so we need more public health clinics. City governement has made some smart and drastic cuts in its current budget – there’s only so much you can cut and still keep the city running well. I don’t know if the 1/2 percent is fair or needed, but I’m all for keeping the city solvent and able to address our needs.
Matthew – the way I figure it, the city has the info (from tax receipts) necessary to figure out the average drop in income since last year. If they instituted city government-wide salary reductions based upon that average percentage drop and still had a demonstrable shortage of tax income, then I’d be happy to pay an increase.
“those with no incomes would pay nothing at all.”
what a bargain! maybe i’ll get fired between now and August!
I really do want to see how all these cities without city income taxes manage it. Boston can get a lot of money out of property taxes because, even with the fall in real estate values along the East Coast over the last year, valuations are still very high. That wouldn’t explain Memphis or similar regional metro centers, though–and those cities are closer to being our real peers.
Also, jpizzow: Why and how did this become a suburban-sprawl thread? Cities without city income taxes include Atlanta, Phoenix, and Los Angeles, according to the link KyleEzell found. (Thanks for finding that, Kyle, BTW.)
I think Rockmaster has a point when he talks about this being just another facet or iteration of the old sales vs. property vs. income tax and state vs. local taxation debates. (One can also add user fees and enforcement revenues to municipal income sources as well.) That said, I’m working on the assumption that policemen, firemen, etc. make comparable salaries in Memphis, Indianapolis, Dallas, and Oklahoma City to what they make here. I’m also working under the assumption that all of those municipalities are required to balance their budgets, and that those budgets have faced stresses from declining property values and commercial activity. Therefore, I’m curious to know how they fund their activities. Maybe their budgets really are substantially smaller per capita than ours, but I’d like to see that, too–and what it is that we do and they don’t.