By the numbers
2 percent: Current income tax rate
2.4 percent: Proposed income tax rate
$6.7 million: Revenue the tax would raise per year if approved by voters
The Springfield News-Sun provides complete coverage of government spending, including extensive coverage of the city’s general fund budget and a projected $930,000 budget deficit.
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Springfield city leaders said they want to increase local income taxes to maintain services, fix roads and hire more police officers, but opponents believe the city has asked for more money than it needs to balance its budget.
Residents will vote Nov. 8 whether to raise the city’s income tax for five years 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, the tax would cost an additional $9.75 per month.
“The city is at a financial crossroads,” Springfield City Manager Jim Bodenmiller said. “We are on the brink of not having enough money to operate. For the last several years, expenses have outpaced revenues and clearly that trend can’t continue.”
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The city projects it will collect about $37.9 million in general fund revenues this year, including about $28.9 million in income taxes. But it also estimates it will spend about $38.9 million, which leaves it facing a $930,000 deficit.
But the tax hike will only further decrease the population, and make the city less competitive at recruiting jobs and encouraging people to live here, local attorney Dan Harkins said. He’s treasurer of Citizens for Springfield City Government, a group opposed to the tax increase, and previously ran unsuccessfully for city commission.
“The taxpayers cannot afford to maintain fiefdoms for the current incumbents,” Harkins said. “What we have to look at is the economic situation we find ourselves in and we need to be competitive regionally.”
The city wants to increase taxes six times more than necessary to balance its budget, according to the opposition committee’s literature. The city has an opportunity to cut costs significantly and be more efficient, Harkins said.
“If we want to be competitive, we can’t raise the taxes,” he said.
A resident advisory group analyzed Springfield’s budget earlier this year and recommended asking for the smallest tax increase the city needed to fix its finances and continue to provide services.
“We’re not asking for a dime more than we need,” Bodenmiller said.
The city’s proposed income tax increase is a complicated issue, Springfield resident Tom Myers said. He’ll probably vote yes, but said it will be difficult for some people to pay the increase.
“You’re talking about people who are right on the brink, day-by-day, paycheck-to-paycheck and that’s not even enough,” Myers said. “They’re getting food stamps after they work 40 hours. It’s tough.”
City employees must also reduce their pay and benefit packages to become more in line with the private sector, he said.
“It’s got to start going back down the other way,” Myers said.
Loss of revenue
Springfield is expected to collect about $38.1 million in total general fund revenue next year, less than it operated with before the Great Recession hit about 10 years ago.
The city is also expected to receive about $1.7 million in local government funds from the state next year, down from about $5.4 million in 2007. The police levy fund and fire enhancement fund are also both down about $1 million annually.
“We’re literally $5.7 million short of where we would be had those cuts not taken place,” Bodenmiller said. “We just can’t survive that way.”
The city currently has about 560 employees. Over the past 10 years, the city has cut about 140 positions to live within its means, he said.
About 75 percent of the city’s budget is made up of safety services, including police officers, firefighters, dispatchers and the municipal court. The city’s charter requires minimum staffing of 124 police officers and 127 firefighters — limiting the city’s ability to cut those costs, he said.
“I firmly believe that based on our call loads, we need the number of people we have,” Bodenmiller said, “but that’s just a harsh reality.”
Cities across Ohio have faced cuts, he said. Of the 247 cities in Ohio, there have been 183 tax increases on the ballot since 2013, including 34 requests on this Nov. 8 ballot, Bodenmiller said.
Six of the 20-most populated cities in Ohio have asked voters for tax increases this year. Dayton and Cleveland are both asking for income tax increases next month.
“Many, many cities are in the same boat,” Bodenmiller said.
Better roads, more police
If the income tax increase is approved, most of the new money would replace recent cuts to state funding and maintain current services, Bodenmiller said. It will 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.
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An additional $2 million would go toward a street improvement fund. The rest would pay for a Safe Streets Task Force, a special police unit to combat violent crime and heroin abuse. It would also allow the city to update its aging police and fire fleet.
Those improvements would allow Springfield to change its image, one of the biggest challenges it faces, Bodenmiller said.
“When people see the condition of our streets and they hear some of the issues that are happening and reported in the media, it gives Springfield a bad name and we have to turn that around,” he said. “It takes revenue to do that. We have great services here, but it takes money to keep those up.”
The money will also be used to rebuild the city’s dwindling reserves. At the end of last year, the city’s rainy day funds stood at about $2.3 million or 6 percent of its total budget. With the projected deficit this year, those reserves are expected to fall to about $1.4 million.
The city’s unofficial goal is to set aside about 10 percent of its total budget. Those reserves will likely be depleted as early as 2017 and no later than 2018, Bodenmiller said.
“We don’t want to be labeled under fiscal emergency,” he said. “We don’t want the state to come in and govern our operations.”
If the levy fails, up to 10 civilian workers at the police division would be laid off and replaced by removing officers from the street. It would also close the Johnny Lytle Substation, which houses many of the Community Response Team’s programs.
It will also eliminate popular programs such as Bike Camp and Safety City.
“The people will certainly feel the loss of the police from the street, there’s no doubt about that,” he said.
The city also would lay off up to 25 non-represented employees if voters reject the tax increase, he said, many of whom work at City Hall. There are currently 85 employees at City Hall, including the five part-time city commissioners.
“At the end of the day, I have to balance the budget,” Bodenmiller said. “It’s nearly impossible to come up with the $6 million-plus that we need in cuts. We can’t cut our way to prosperity.”
The city would also shutter Fire Station No. 5 if the tax increase fails and shut down one EMS unit that responds to calls across the city, Bodenmiller said. The station currently runs a full operation from the facility, including 12 employees, he said.
By closing the substation and the fire station, the city would save money through less operating costs and maintenance to older equipment. The employees would move to different stations, Bodenmiller said.
The city would cut costs, employees and services from every department and division in some form, the city manager said. The decision to cut police and fire services isn’t a scare tactic, he said.
“We have a serious budget deficit to fill and it’s all coming to a conclusion in 2017 and 2018,” Bodenmiller said.
The city is more interested its income tax revenue than it is about the number of people who live here, Harkins said. He used the Prime Ohio Corporate Park as an example.
“It’s on the interstate and all they care about is someone coming in, working here and paying the 2-percent tax, not spending their earned income here and not being a part of the local economy,” Harkins 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. Some Springfield residents who live here, but work elsewhere may pay up a total of 4.5 percent income tax, he said.
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“The city has looked more corporately to its own existence than it has to protecting and promoting the community,” Harkins said. “It’s narrow-mindedness has caused the city to become noncompetitive and as a result, we’re losing population. It’s a cycle that has to end.”
Springfield doesn’t offer anything that warrants a premium tax rate, Harkins said.
“The schools are in poor shape and the municipal services are indistinguishable from other communities,” he said. “The police and fire are very competent, they’re responsive, but that’s the case with other communities as well.”
The committee opposed to the tax levy has signs stating the levy is a 20-percent increase. While that’s mathematically correct, it’s misleading, Bodenmiller said. For example, if the tax fails, the city will likely close both the Johnny Lytle Police Substation and Fire Station No. 5 — meaning it will shutter 50 percent of its police departments and 15 percent of its fire stations, he said.
“I just think people need to be very careful about what they read and make sure they’re fully informed,” Bodenmiller said.
The city has made no effort to reform local government, Harkins said. Springfield could save money by consolidating in several areas, he said, eliminating the need for the tax hike.
The city and county are now in the third year of discussions for creating a combined 9-1-1 dispatch center, Harkins said. County Commissioner John Detrick said the facility could save $1 million per year, but others have said it may cost a similar amount to run both city and county dispatches under one umbrella.
Springfield could also petition the state legislature to eliminate one of the three municipal court judges due to decreased workloads, Harkins said. The Municipal and Clark County Clerk of Courts offices could also be combined, creating efficiencies for both offices, he said.
The city and the county could also merge their building inspections departments, both of which operate under the state’s building code, Harkins said.
“The list goes on in terms of opportunities for cost savings,” he said.
The decline in population may also have an effect on the types of grants the city qualifies for, he said. The Springfield population was about 59,000 people as of July 1, 2015, according to estimates from the U.S. Census Bureau.
In 2006, Springfield had 569.6 employees, according to its recently released state audit. Last year, the city had 563.8 employees – a 1 percent decrease.
“The city really hasn’t shrunk the size of its personnel at all during this period of time,” Harkins said. “If you go to the private sector, there is an expectation for employees to be more efficient, to do more. The government has failed to fulfill the same expectation in its operations.”