Committee forms to oppose Springfield income tax increase

Updated Sept 24, 2016

A group has formed to oppose Issue 2, the city of Springfield’s proposed 0.4-percent income tax increase.

The Citizens for Responsible Springfield City Government filed its committee with the Clark County Board of Elections earlier this month and is raising money to erect yard signs, said Treasurer Dan Harkins, a local attorney.

Springfield residents will vote on the five-year earned income tax increase on Nov. 8. The income tax rate in Springfield would increased from 2 percent to 2.4 percent if approved.

The tax would generate an additional $6.7 million annually. For a worker making $30,000 a year, it would cost an additional $9.75 per month.

The opposition group has about 10 members at this point, Harkins said.

“We’re concerned the city government is mismanaged and has been irresponsible in its use of tax dollars,” Harkins said. “It fails to provide fiscal discipline.”

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Springfield put together the Community Financial Advisory Committee to be transparent and open about how money is spent and how it got into its current financial situation, Springfield City Manager Jim Bodenmiller said.

“They have clearly stated they felt there’s been no mismanagement of funds,” Bodenmiller said.

Springfield is expected to collect about $38.1 million in total general fund revenue next year, less than the city operated with before the recession hit almost 10 years ago. The income tax makes up about 78 percent of Springfield’s general fund revenue.

The city would use the tax increase to maintain current service levels, improve roads and hire more police officers, city leaders said.

The money will also allow the city to maintain funding for the National Trail Parks and Recreation District, as well as keep both Fire Station No. 5 and the police substation on Johnny Lytle Avenue open. The reduction would also cut 10 of the 11 civilian positions at the police division, removing officers from the street to fill them.

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Bodenmiller’s threat to cut safety forces if the levy doesn’t pass is disingenuous, Harkins said.

“The city charter clearly sets the number of public safety forces,” Harkins said. “The city government can provide public safety services as needed by the residents without increasing taxes.”

If the issue fails, the city plans to make cuts across all departments, but it’s harder to do with police and fire because of the minimum staffing in the charter, Bodenmiller said.

>>READ MORE: $125K study will analyze Springfield’s finances

“The only real ways left there are to affect things like the number of stations, overtime hours and the number of civilian employees,” Bodenmiller said. “The decision we’ve made with input from all departments and the city commission, are very serious and genuine. We’re in a very tough financial spot. It’s just a simple fact.”

The city and chamber have agreed to pay $125,000 for an independent study of the city’s finances. The performance audit is expected to be completed in the next few weeks. However, the audit isn’t examining the city’s entire operations, Harkins said.

The performance audit is looking at the city’s general fund, police levy fund and the fire enhancement fund, Bodenmiller said. The utility funds — such as water and sewer — have no bearing on the general fund and are separate enterprise funds, he said.

“You can’t just transfer money from sewer or water to the general fund,” Bodenmiller said.

The city of Springfield gives a 50 credit on its local income taxes to residents who live here but work and pay income taxes in other cities. Some cities, such as Columbus, give 100 percent credit.

“As a result, we’re not competitive in getting commuters to live here,” Harkins said.

A fair tax system would encourage commuters to live here, improving property values, he said.

“The focus needs to be on rebuilding the population,” Harkins said. “A tax increase would increase the exodus of individuals.”

The city will likely run out of reserves fund as early as next year, Bodenmiller said, and definitely in 2018.

“We’re not going to reverse decisions that would take even further revenues away,” he said.

Public safety, streets and jobs are what will help people stay or come back to Springfield, the city manager said.

“We have to change our image and rebuild our community,” Bodenmiller said, “and to do that you need resources.”

A levy campaign, Citizens for a Stronger Springfield, has also been established. Former Springfield City Schools Superintendent David Estrop is leading the levy committee. He also served on the Community Financial Advisory Committee, which recommended the performance audit.

Some reductions may have to occur, Estrop said, but it won’t be enough fix the finances.

“We can’t cut our way out of the problem,” he said. “It’s very straight forward: We’re either going to increase revenue by increasing taxes or we’re going to have to live with less services.”

It’s not surprising a group has been formed to oppose the issue, he said.

“People don’t want to see their taxes increase, but you can’t have it both ways,” Estrop said. “You can’t say we want all these services and then more and not pay for them.”