Fiscal Emergency could be headed Toledo’s way…
I have the documentation from the Mayor’s latest CSI meeting that was held yesterday but I have not had time to go through it to write a post and to upload/share the material. In the meantime, I recommend this piece from FOX Toledo on the from Monday night and this piece from Thursday that reports after going line by line through the budget, it’s only been reduced to 38 million. It was 43.8 million…
I am however continued to be troubled by the inclusion of an income tax increase as a way to balance the budget, since from how it was explained to me previously and was clearly stated before Toledo City Council by Law Director Adam Loukx, you can not use expected money from a new tax or new levy to balance a budget, you can only do that with a renewal item. It is possible to create an on-paper budget cut that could be filled by a new tax or levy that passes later, but the amount expected to be generated would have to appear as a cut. This means what’s possible is scheduled cuts or layoffs that would happen towards the end of the budget period that would not be put into effect if the voters approved a tax increase.
I will be very interested to see the documentation you’re talking about from the latest CSI meeting. Quotes like this one from the first article make me really worried:
I know people realize that if you want services you have to pay for them, it’s the way everything works. Unfortunately Mayor Bell doesn’t seem to know that there is a difference between essential services and non-essential services.
A quick real world example, if I have a budget based on x dollars and get a paycut (less people paying taxes), I have a few options, I could go to my boss and try to get a raise (tax increase/fees) but will most likely be told to manage my money better because everyone including him is hurting in this economy. My second option is to go bankrupt (would this be like Financial Emergency?). My third and probably best option is to look at my budget and see what are essential and non-essential services and see what can be cut.
In my example, essential services are things like housing, utilities, food and transportation (safety, infrastructure, items demanded in charter or state law [though home rule might get us around state law]). Non-essential services would be things like cable, dining out, and going to entertainment venues (Pools, parks, things not mentioned in essential items).
I could try to make changes like going to basic cable from premium, only eating out once a month, stuff like that (Charging to use the pools so they cover thier own maintenance, letting communities take care of the park if they want otherwise they can’t use it)
I guess I could also go to pawn shop for a quick infusion of money (selling property we shouldn’t be holding anyways like the Erie Street Market).
Should I still not have a balanced budget then it is time to figure out where I can cut from my essentials like moving to an apartment and selling the house or eating the really cheap food at the grocery store (not repairing every road or just using temporary filler for pot holes?)
I hate to say it but it really is as simple as you can pay for non-essential services when times are good, but you have to be able to cut them when times are bad.
February 5th, 2010 at 7:56 amLisa,
February 5th, 2010 at 10:34 amCan we get an itemized list of non-essential services?
Once we get it then lets put it to a vote on the blog so we can see what we could pssibly live without for say a year or two. If you can’t do it maybe Toledo Free Press would.
It might be in some of the documentation that the Mayor’s office has sent me. I’m going to go through that over the weekend, if I don’t have it? I’ll ask for it. They have been really great about sharing information with me that I ask for. So far the Bell administration has been very transparent with me as a blogger and I do appreciate that.
February 5th, 2010 at 10:59 amthe best option may be to go bancrupt – we can get out of these unreasonably generous city employee contracts and rewrite rules for numbers of command officers for both police and fire. these reductions in cost for over-compensating employees would allow us to maintain (or return to) the correct manpower numbers across the board. getting these contracts corrected would make it much more palatable to consider a temporary tax increase or permanent entertainment tax. we currently are experiencing the classic “tail wagging the dog” scenerio where our employees in the safety forces are advocating tax hikes to ensure they don’t have to “sacrifice” their life-styles: desk jobs after short careers on the streets, cushy benefits including no medical co-pays and completely tax-payer funded pension, and retirements in their early 50s.
February 5th, 2010 at 12:59 pmThat may be the case Zimmy, but since we accepted the COPS grant I’ve wondered if bankruptcy was the option if that would create a scenario where that money would also have to be paid back and would not be able to be included as part of a bankruptcy. The federal government typically ends up being protected as far as always getting their money.
February 5th, 2010 at 1:09 pmIf they raise taxes, I’ve got a feeling we will be seeing a lot more vacant houses in Toledo.
February 5th, 2010 at 2:44 pmNnnnnooooo! Toledo is a fiscal emergency?! No way!
February 5th, 2010 at 3:22 pmIf they raise taxes, I’ve got a feeling we will be seeing a lot more vacant houses in Toledo.
If that was the case, Ottawa Hills would be empty.
February 5th, 2010 at 3:27 pmThe Village of Ottawa Hills has a 1.5% municipal income tax on income earned in the Village or earned by Village residents. Village residents who pay income taxes to another community receive partial credit (50% of the lower rate) for those taxes paid.
So, Ottawa Hills charges less than Toledo…
February 5th, 2010 at 3:31 pmTough to leave if there isn’t anyone around with money to buy your home.
February 5th, 2010 at 3:35 pmLisa,
You are right on with the use of future income tax revenue and that it can not be used to balance the budget. You can only assume approval of an existing levy at the same rate. Been through it a number of times when looking at other fiscal entities in Ohio and their budget deficits.
February 5th, 2010 at 4:36 pmI have advocated before for an increase in Toledo’s payroll tax. I still consider a 2.25% tax to be a very low rate. This is especially true when we couple the low local rate with the tax cuts that have occurred at both the national and state levels over the past 8 years.
The most important factor is that the tax is paid by all of those who WORK in the city, as well as those who live in the city. People, like my wife and me, who live in Sylvania but work in Toledo, pay the Toledo tax. The Sylvania rate is 1.5% as in Ottawa Hills, but unlike Ottawa Hills, Sylvania gives a credit for the full 1.5%, if you work in a city where the tax rate is at that level or higher. We do pay a small annual additional fee for some Sylvania city services.
Because I don’t live in Toledo, I cannot vote for or against an increase in the Toledo tax. I am appalled at those area residents who act as though what happens in the City of Toledo does not affect them and their lives in the suburbs or exurbs. After all of the cuts that have already taken place, I am anxious to see the list of services still existing that most people would feel are “non-essential”.
I want a safe and orderly central city. I am more than willing to pay more, if that translates into more police officers, more fire fighters, and better overall services in the city in which I grew up, and into which I travel and/or work almost every day of the year.
February 6th, 2010 at 1:55 am