WILMINGTON — Council members approved, in a 6-1 vote, a first reading on a resolution placing an earnings tax on the November ballot. A second reading was tentatively scheduled for the June 2 meeting of council.
Council member Lonnie Stuckert voted against the resolution, with all other council members voting in favor.
The as-yet-undrafted earnings tax would supplement the city’s current 1 percent earnings tax, raising it to 1.5 percent. After five years, the tax would lower to 1 percent, unless council asks voters to re-approve it and they vote that way.
Many council members voting in favor of the tax said they didn’t see an alternative to a tax, citing reduced revenues and a need to provide city services. In disagreeing, Lonnie Stuckert said council hasn’t fully considered alternatives.
Council member and finance chair Mark McKay said state cuts to local government aid, the elimination of the inheritance tax and reductions to license taxes have reduced the city’s revenues.
He said council has wrestled for years with the general fund, but that no one, including him, wants a tax increase. Now, he said, that tax is necessary.
“I’m pretty biased and certainly hope that we move unanimously forward to present our citizens with an effective, reasonable, affordable way to keep our city moving in the direction that we have become accustomed to,” he said, referring to the city’s services and previous comments of how the city deals in customer service. “If we don’t provide good customer service, people will shop elsewhere.”
“The city’s at a point where it needs tax,” said council member Matt Purkey. “We have to have this revenue measure to continue operating the services at the meter level we’re operating now.”
“I’ve been pretty much anti-tax,” said council member Joe Spicer. “After struggling with this for the last several months, seeing what’s going to happen if we don’t get some additional revenue, I think it’s pretty obvious that we’re going to lose vital services plus not get our streets repaved.
“Reluctantly, I am going to support that we take this to the voters,” Spicer continued. “On the other hand, I still feel strongly that we’re still spending a million and a half dollars more than we’re bringing in. … We’ve got to right-size our city so that we can live within our income.”
Lonnie Stuckert agreed with Spicer about right-sizing the city’s services. “I do not feel that this is a good decision because … we’ve discussed one option,” Stuckert said. “I don’t feel like there were enough options presented for the people to choose from. I don’t think this is the best idea.”
Stuckert said he wasn’t able to present such an option but told Mark McKay he thinks he can prepare it for future discussion.
Several council members said they couldn’t see any alternative.
Council member Kelsey Swindler said she can’t “see where the cuts can be made without drastically reducing city services.”
“There are options to contract the work out,” Stuckert said. “There are plenty of options, they just haven’t been discussed yet.”
“Losing the police is not uncomfortable, it’s wrong,” Swindler said. “It’s not protecting the city of Wilmington to cut into vital city services.
“I feel strongly that that’s our duty and our responsibility as a council to look out for the kinds of services that we are responsible for providing to the city of Wilmington,” Swindler continued. “I don’t think we can do that without additional revenue.”
“I think we need to consider the people who have lost purchasing power and consider the fact that the people employed by the city haven’t lost any purchasing power at all,” Lonnie Stuckert said. “They’ve gained purchasing power while the citizens have lost it.”
Swindler said those with less purchasing power would be most impacted by the loss of services and Stuckert said they certainly would be impacted by increased taxes.
Jonathan McKay said he’s seen department heads trim budgets for years and can’t trim any more.
“We’re in the middle of a heroin epidemic,” said Jonathan McKay. “We don’t need to be cutting police force, or fire or anything of that nature. We need to give the citizens good streets. We need to give them every service that they have come to expect from us.”
Council member Randi Milburn said she would revoke her support if the city began a “bully” campaign.
“That stuff needs to stop,” she said, later adding that includes talks of cutting police officers, for instance. “Come at the voters with a common-sense approach, not a bully campaign. … That’s why we’re losing trust with voters.”
Milburn said she is constantly reminded of her no-tax campaign promise.
“I do not want taxes,” Milburn said, adding she doesn’t know how she’ll vote for it at the polls. “We need to budget and plan responsibly. That is what I’m still sticking to.”
“If this tax doesn’t pass, then we’re going to have to cut a million and a half dollars,” Spicer said. “We’re going to lose other vital services. … If we cut that million and a half dollars, we still can’t fix our streets, we still can’t do any improvements.”
Purkey said most of the budget has been trimmed as much as it can, saying, “Let’s turn over every stone and make sure we go through the budget and cut as much as we can, but we have to have a revenue measure.”
Citizens weigh in
During public comment, Wilmington resident Paul Hunter said he is worried it won’t pass because “it’s too big a bite,” and he is bothered that retired residents, like himself, wouldn’t have to pay any of the tax.
“That’s not right,” Hunter said, adding that the wealth of the city is tied up in real estate.
Hunter previously suggested council levy a property tax.
“It’s a smaller bite that I think has a better chance of passing,” he said. “If it doesn’t pass, we get $0.”
Purkey said that at the special meeting last week, it was determined that it would take more than 9 mills to make up the needed money.
Mark McKay told Hunter that many retirees would say they were on a fixed income. Milburn suggested the same can be said of employees who haven’t received raises in several years.
Wilmington resident Sam Stratman supported the prospect of allowing voters to decide the tax.
“We are a hub of economic activity for not only the entire county but for the region,” Stratman said. “They enjoy our roads. They enjoy our safe services. The companies that locate here need the services that we, the city, the corporation of Wilmington, Ohio, provides.
“An earnings tax captures at best the benefits that are accrued to people who live outside the city,” Stratman continued. “It is very appropriate that this is an earnings tax because it will capture income from people who do not live here but benefit from the creation of this economic structure that we have here.”
Stratman said that Lonnie Stuckert and his father, Loren Stuckert, had been trying to “outsource” city services for some time.
“It really is Mr. Stuckert your responsibility, also, to be creative and tell us what you’re proposal is in terms of alternatives,” Stratman said, adding it feels like “a dodge.”
Stratman also called on Spicer and Milburn to present ways to streamline the budget so more investments can be made to make Wilmington “a thriving public corporation.”
“Less than a year ago, the council then was brought a proposal to restore 5 years’ worth of steps along with a substantial across the board increase to all of the contracted, union employees and to everyone else,” said former council member Loren Stuckert. “We were told we had the money for this.”
Loren Stuckert said council should ask how it had money then for those raises, which he said cost $500,000, but now is desperately needing money.
“You’re sitting here with no money, and you’ve already got programmed into your next budgets increases to the cost of your employees,” said Loren Stuckert.
Loren Stuckert said council needed to put a brake to increasing costs in the future, adding that many residents go years without raises.
“Paved streets is every bit a core responsibility of this city as paying its employees are,” he said. “Streets doesn’t have an advocate. Streets does not have a union. … So streets does not get done.”
President of Council and former mayor Randy Riley interrupted Loren Stuckert.
“All of this has been discussed … to quite a length, including the raises that have been given,” Riley said. “We have to honor union contracts. We don’t have a choice. People will not continue working forever without a pay increase occasionally.”
Riley said the city’s employees went six years without a pay increase before getting them during Riley’s administration “and for that I do not apologize.”
Before the 6-1 vote, Wilmington Mayor John Stanforth said, “If you want me to cut a million and a half, I can do it.”
He said the police department and dispatchers would likely suffer. Union contracts would be violated, most likely resulting in lawsuits, Stanforth said, and the city’s bond rating would probably be lowered.
“I can’t undo what they’ve done in the past,” Stanforth said. “I can only pay the bills today. … Now, you answer to your citizens when the police officer doesn’t show up timely. You answer to your citizens when your streets don’t get plowed because you shut the streets department.”
Stanforth said subcontracting work wouldn’t help because even subcontractors have to get paid.
Stanforth, Stratman, Wilmington resident Bill Liermann and Mark McKay called for a unanimous vote.
“If this council’s not united, they’re going to think we’re hiding something,” Stanforth said.
“Let’s move forward. Let’s be all in full agreement,” Liermann said. “And let’s make this happen. … And make this pass in the fall.”
Liermann also suggested council create a committee of citizens to support the earnings tax.
“You have to trust the electorate,” Liermann said. “You have to trust the public. They’re the ones that will earn your trust if you tell them your story.”
Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.