Wednesday, February 11, 2009

No Income Tax on the Ballot in May

There will be no income tax proposal on the May ballot. The City failed to meet the 90-day time requirement set forth in our City Charter by which to submit a tax proposal for the ballot. The Charter requires:

Any ordinance or resolution listed below in paragraphs (a) or (b) will not become effective, after passage thereof, until Council submits such ordinance or resolution to the electorate at a regular municipal or general election occurring more than ninety (90) days after the passage of the ordinance or resolution, and such ordinance or resolution is approved by a majority of the electors voting thereon in the city:
(a) One approving or providing for any increase, or the renewal or the extension of any increase in the municipal income tax rate charged upon any and all income taxable within the City of Elyria; or
(b) One approving or providing for any decrease, or the renewal or extension of any decrease in the municipal income tax credit allowable for any and all income taxable within the City of Elyria.
(Enacted 5-8-07)

Since both an increase in the municipal income tax and a decrease in the municipal income tax credit were proposed by the seven members of Council, this Charter section was invoked and it was necessary to pass the ordinance 90 days prior to the election. This was not done and there will be no income tax increase on the May ballot as a result.

I was a proponent of this Charter Amendment effort, which is the primary reason I became involved in Elyria politics, after City Council unilaterally reduced the tax credit by 50% without voter approval back in 2004. Voters ultimately rejected the imposition of the tax credit reduction and voted overwhelmingly to change the City Charter so that it could not be reduced again without first coming to the voters and obtaining approval. Through this effort, I began to attend City Council meetings, committee meetings and witnessed firsthand the way that decisions were made in this City with few questions and little discussion (to my great disappointment). I also met hundreds of residents who were not satisfied with their representation on Council in our ward and, as such, I chose to run for Ward 4 Council. I was recently elected to my first term, which commenced in January 2008.

It is important to note that the failure of the City to meet the time requirements to get this on the ballot does not affect the cuts that must be made immediately to the budget. We have not yet heard from Mayor Grace what these cuts will entail, although we know that he has already laid off three part-time workers in the Streets Department (none of whom are paid out of the General Fund) and has threatened to eliminate all programming in the Parks and Recreation Department (including the Ice Rink, which makes money and is in high demand while it is open over the winter months). We are still waiting to hear the sum and substance of other cuts, although it has been discussed that $500K can be cut from City Hall and there could be $600K in cuts to police and $600K in cuts to the fire department.

The only impact of having the proposed Scenario 2 on the ballot in May would be that, if passed, the cuts from the General Fund spending could be rolled back sooner as the funding was restored. There is no guarantee that any tax increase would pass and the City must cut immediately. The longer the administration waits to make cuts, the more it costs the City every day and the deeper the cuts will have to be when they are completed.

The 90-day time requirement was not the focus of the Charter Amendment effort. Rather, the focus was to submit for voter approval any income tax increase, including a tax credit reduction (imposing Elyria city income tax on those who work outside of the City and pay an equal or higher rate to the city where they work). It is also interesting to note that the original Charter Amendment, as drafted before it was revised and circulated, also included a provision for voter approval of utility rate increases and license plate fee increases. That provision had less support and was removed in the final version to keep the focus on the income tax credit.

Contrary to popular belief, although I was the leader of the effort to get the Charter Amendment on the ballot, I was not the original drafter of the proposed Charter Amendment language. It was drafted in 2005 by legal counsel retained by a local businessman who was determined at the time to recall Mayor Grace due to his stated belief that the Mayor was not properly managing the City. Although I refused to participate in the proposed recall effort of 2005, I was provided with the work product Charter Amendment language, which allowed me to propose the Charter Amendment to City Council. When City Council refused to consider the Charter Amendment, I placed the proposed language on a petition that was circulated by many residents to obtain the requisite number of voters and, ultimately, get it on the ballot and successfully change the City Charter.

At this point, however, the time requirement set forth in the Charter Amendment is not the problem. The real problem is the City's failure to check timelines required by the Charter and ensure that all necessary requirements were met, including the time requirements. This lack of attention to detail by the City is the direct cause of the failure to get the proposed tax increase before the residents on the May ballot.

We must now focus on other things that are within our control to raise revenues, such as considering the rollback of tax breaks in our community and determining ways in which to attract new jobs to this area, working with other regional leaders. We must look to public-private partnerships to provide funding, programs and services. We must continue to change the way we look at our City's problems and identify creative solutions in order to be successful.

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