In 1983, Toledo voters passed the first 3/4 percent income tax. Back then, the City of Toledo employed 2,963 people. The unemployment rate was 10.6 percent. The population was 354,635 and the city was comprised of 84 square miles. The three-quarter percent  brought in $16.5 million and the total 2.25 percent paid for police, fire, refuse and most other general fund departments.

Fast forward to 2012 — the City of Toledo employs 167 fewer employees than it did in 1983. The unemployment rate is 8.7 percent for 2012. The population is 287,208 and the city is still comprised of 84 square miles. The three-quarter percent  brings in $51.5 million and does not quite pay for the fire department, which has a budget of $60.2 million. The police budget for 2012 is $73.4 million.

Nonemployed seniors did not pay the 3/4 percent tax then and still do not today. It is not paid on property tax, pensions, social security, dividends, interest, annuities or capital gains. The three-quarter percent is paid on earned income only.

Sarantou

This means more than 55 percent of Toledo does not pay income tax. The 2.25 percent income tax rate has not increased since 1983. Most other levies have sought increases; schools, library and the zoo have all increased their millage requests throughout the years and Toledo has remained constant.

Toledo City Council, along with the administration of Mayor Mike Bell, has made public safety a priority. Therefore, though there have been cutbacks in general fund jobs due to the loss of solid waste and retirements, upcoming classes are being formed to make sure public safety can keep in step and properly protect the citizens.

Currently we have a police class that will graduate 40 officers this May. A fire class of 30 will begin this December. Additionally, another police class of 40 will begin this September. These classes will help us to increase our vital safety forces. However, we need additional police and fire classes in 2013 due to many upcoming retirements.

In the general fund only, employees in the City of Toledo are now 1,596; in 2002 it was 2,126. This is a reduction of 530 employees. Public safety comprises 1,351 general fund employees or 85 percent of the general fund employees. That means the other 25 departments including human resources, building inspection, finance, council, economic development, parks and taxation operates on 15 percent of the general fund budget. In all 25 departments there are only 245 employees; this for a population of 287,208.

On March 6, voters of Toledo will decide whether their mayor and Council have been effective stewards of the treasury during the greatest recession since the depression. We have not raised the income tax rate and we have reduced our employees significantly.

Today, Toledo has 9.1 employees per 1,000 people compared to Akron, (10.4) Columbus (14.1), Dayton (10.6), Cincinnati (17.4) and Cleveland (21.8). Our bond ratings have held steady and Moody’s and Standard & Poors have upgraded Toledo from a negative outlook to stable.

These are historically very challenging economic times but Toledo is much stronger today and our economic future is improving. Jeep, Powertrain, Hollywood Casino, the University of Toledo and many other businesses are leading our growth. With your support of the renewal of the 3/4 percent we can continue to make Toledo a great place to live, work and raise a family.

George Sarantou is an at-large councilman for the City of Toledo.  He is chairman of its HR, IT and Finance committee. Email him at george.sarantou@toledo.oh.gov or call him at (419) 245-1050.

Tags: 3/4 percent tax, City of Toledo, George Sarantou, Mike Bell

This entry was posted on Friday, March 2nd, 2012 at 12:00 am and is filed under City of Toledo, Guest Column, Opinion.
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Layoffs and cutbacks would abound if voters rejected the 3/4 percent payroll tax March 6, according to city officials.

This is not a new tax but rather a 28-year-old source of city revenue that appears on the ballot every four years for renewal. People who live or work in Toledo pay a permanent 1.5 percent tax plus the “temporary” tax, which levels out to 2.25 percent.

Between years of slumping income tax revenue, which has only recently started to recover, and the state’s disappearing allowances for city governments, this vote might be more important than ever, said Councilman Joe McNamara, a Democrat.

The city would have to lay off as many as 500 employees in public safety, all recreation staff employees and diminish or end road paving altogether if Toledoans voted down the tax, McNamara said.

“You could almost lose half your police force, half your fire force, half of just about everything,” Mayor Mike Bell said. “It becomes an ugly scenario.”

Gloomy finances

The temporary tax brings in about $51 million annually. It fuels the capital improvement fund, public safety and the general fund. Up until recently, the three split tax proceeds evenly. But the recession has pushed the administration to move money from the capital improvement funds to help pay for safety. The city has not moved the maximum amount allowed, which is $17 million, Bell said.

If it passes, the city plans to spend at least $31 million on street repair.

The 3/4 percent earned income tax doesn’t cover the budgets of one of the safety departments. The police budget reaches more than $72 million and the fire department’s budget is about

$60 million, said City Councilman George Sarantou, a Republican, who chairs the finance committee.

The city’s finances have been gloomy since 2008, when cumulative income tax collections took a 14 percent dive in just one year. Collections bowed more than 11 percent between then and 2009, only to creep up by 2.5 percent by 2010. All the while, the consumer price index, which measures inflation, hovered high above what the city was pulling in. The index rose by 5 percent between 2007 and 2008, stagnated for a year and continued to rise.

City income tax collections have risen since 2009, actually jumping by about 8 percent between 2010 and 2011. Even still, the city is pulling in about as much as it did in the early 2000s, with the inflated consumer price index of today.

“Even though our local income tax revenue is increasing, our state revenue is flatlining,” Bell said.

Shrinking state budget

Gov. John Kasich’s budget cuts included shrinking city allowances. In 2007, Toledo received $25 million from the state. By 2013, the city will receive $8 million. Estate tax revenue will also vanish.

Prior to these changes, when Bell took office, he was staring down the face of a $48 million deficit. The administration did not lay off employees. Instead, unions made concessions on deals such delaying compensation time payouts. The city became more aggressive about delinquent taxes and went after collections that hadn’t been made. The mayor’s office now has no secretaries, so sometimes if constituents call they might get voicemail, said Jen Sorgenfrei, spokesperson for the mayor.

Mayor Mike Bell

“We have gone and gotten money out of every nook and cranny around,” Bell said. “We don’t have that option anymore.”

The tax first appeared in the early 1980s. Voters had rejected a boost in income taxes prior, but in 1982 voters approved the 3/4 percent tax. The city was in morbid shape at the time, with no recreation department, closed pools and mounting fiscal problems concerning public safety, McNamara said.

The last year that Toledoans voted on the tax, 2008, the issue passed with 60.24 percent of the vote.

Shocked by taxes

Economist and conservative co-host of “Eye On Your Money” on WSPD Linda Bowyer said that the problem with city income taxes is that they are easy to vote for if you’re not the one paying them. This would include the unemployed and, in Toledo’s case, people who are living off of retirement pensions. She added that people who live outside Toledo, but work within city limits, do not get to vote on an issue that affects their taxes.

“It’s sort of taxation without representation,” she said.

Bowyer does not work in Toledo so the vote would not affect her. However, she said, when she moved here from Missouri some 20 years ago she was shocked by Ohio’s taxes. The city income tax is not something that every municipality has and is  another example of the various government entities that tax citizens in the state, she said.

Sales taxes and property taxes tend to be other popular methods of generating city revenue. But the problem with sales taxes is that they place more of a burden on lower income people, because poorer people tend to spend a greater percentage of their paychecks on consumption, she said.

All other major cities in Ohio collect income tax. Columbus has the highest rate — at 2.5 percent — and Dayton, Toledo and Akron are all mid-range with 2.25 percent. Cleveland collects 2 percent and Cincinnati collects 2.1 percent.

“People in government will say ‘We need police, we need fire,” Bowyer said. “I’m not saying they scare people but to some degree they do because they say, ‘Look at some of the horrible things that will happen if we don’t pass this’.”

The question comes down to just how extensive the government should be, she said.

“Is the government necessarily responsible for parks and recreation?” she said. “Are there things that we have government doing right now that could be done by the private sector?”

Bell said the hardest part about explaining the tax is that tax payers havez have just endured the recession themselves, but to remember that this is not a new tax.

“It is essential to the survival of our city,” he said.

Tags: 3/4 percent tax, City of Toledo, George Sarantou, Joe McNamara, Mike Bell

This entry was posted on Thursday, March 1st, 2012 at 12:00 am and is filed under City of Toledo, Community.
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Mayor Mike Bell and the Toledo City Council gathered Jan. 31 in support of Issue 1, which if passed would renew the city’s ¾ percent payroll tax.

The “extremely important” tax helps support city services like the police and fire departments, Bell said during a news conference outside of the council chambers.

If passed, the renewal is expected to provide more than $51 million to city coffers. To put that in perspective, Bell said that the fire department has a budget of $59 million.

“It’s very important that citizens and voters take a good look at this issue,” said Republican Councilman George Sarantou.

“This levy has been with us since 1982,” Bell said. Rather than make the tax permanent, Bell added that the administration wanted to give voters the option to renew it every four years.

“We’re not taking anything for granted,” he said. “We are very much excited to be able to move forward.”

When the levy first appeared, it was designated for fire, police and refuse services. Although the city’s refuse collection was privatized over the summer, Council President Joe McNamara said $4.4 million still comes out of the city’s general fund to pay for it.

Passing the levy is “vitally important” to city services, McNamara said. He added that the issue is nonpartisan and has the support of both parties on council.

“You also have to understand we’re still recovering from the Great Recession,” Sarantou said.

Bell urged voters to turn out for the election. “We cannot do it without public support,” he emphasized. Less than 5 percent of registered voters came out for the Sept. 13 primary.

Council voted that the levy would appear on the March 6 primary ballot late last year. To learn more, visit http://co.lucas.oh.us/index.aspx?NID=74.

Tags: 3/4 percent tax, George Sarantou, Joe McNamara, Mike Bell

This entry was posted on Tuesday, January 31st, 2012 at 6:15 pm and is filed under City of Toledo, Community.
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