WILMINGTON — Among the income that would not get taxed if a proposed increase to the city’s earnings tax passes are Social Security, veterans benefits and fixed-income pensions.
Those exemptions were brought out at a presentation to senior men Monday at Cape May Retirement Village. The presenters included City of Wilmington officials and Dana Dunn, who is co-chair of the Campaign for Wilmington’s Future which urges residents to vote for the tax issue.
Handouts, paid for by the campaign group, were on table tops at the 3M Club meeting and had the heading “Vote For The Tax! Retirees Do Not Pay City Income Tax Now, Will Not Pay Increase If Passed”.
Other things not subject to the earnings tax include interest and dividends, disability benefits, and capital gains and losses, according to the campaign’s website www.forwilmingtonsfuture.com.
Wilmington Public Service and Safety Director Brian A. Shidaker told attendees the city has been keeping its financial head above water by drawing from its cash reserves that were accumulated prior to the Great Recession and the massive job losses that accompanied DHL’s departure.
Comparing dollars in the city’s reserve funds to a savings account, Shidaker said the city has taken money out of its General Fund savings account since 2012 to help fund operations. But at the end of the year, the savings account — which also is called the carryover balance — will go into the red, he said.
If the city does not receive additional revenue, he said it essentially would have to cut 20 percent across the board from all departments that use General Fund money — including the police department, and street maintenance and repair.
Safety services provided by police would be “compromised” if the police force were reduced by that extent, said Shidaker, the former chief felony prosecutor for the Clinton County Prosecutor’s Office. WPD is the largest recipient of General Fund dollars in the city.
One segment of the local population that would benefit if the earnings tax addition doesn’t pass, Shidaker said, are criminals.
“They are very much aware of police presence. And they know if there’s a lot of police officers out on the road, or if there are no police officers on the road. They are aware of that,” he said.
According to Shidaker’s presentation, the additional revenue generated from the proposed earnings tax increase would basically be used in three ways: 61 percent to cover the estimated shortfall in current earnings tax revenues to maintain the current level of services; 22 percent to build the reserve fund back up to the recommended level; and 17 percent discretionary funds.
The new discretionary funds are expected to go toward ramping up repair of city streets, and toward code enforcement.
Wilmington Mayor John Stanforth said the longer a place delays maintaining streets, the more it’s going to cost.
Fixing streets ranges from the less expensive repair of simple cracks to a pricier project involving full-depth repair, he said.
“Eventually they have to be fixed. It’s a question of what that cost will be at that time,” said the mayor.
Concerning code enforcement, first-year mayor Stanforth said he had done the work this year himself.
“I was amazed at the amount of junk properties,” he said at the 3M Club meeting. “So we started on an active campaign to get the city cleaned up, [and] started enforcing the codes.”
The proposed 0.5 percent municipal earnings tax increase is for a temporary period. It would expire after five years, and would not automatically be renewed. Residents would have to approve an extension at the ballot box, Shidaker said.
Former long-time Wilmington City Councilman David Hockaday briefly spoke about another ballot issue for Wilmingtonians: whether to fluoridate the city’s water.
Hockaday opposes the idea. He said those who want fluoride to help prevent tooth decay can get fluoride in fluoridated toothpaste and in other things.
There are two types of fluoride — natural and a fluoride supplement that comes from a byproduct of aluminum smelting, according to Hockaday.
There are impurities in the latter, said Hockaday, adding that water departments have to have special gear to handle it.
“And my question is, ‘Why do we want to put that in our water system at this late date?’,” he said.
Bob Holmes, a 3M Club member who served as host of the meeting, said he took Hockaday to be saying “when in doubt, leave it out.”
Holmes also responded to Hockaday’s comment about fluoride being available in products other than water. Poor people may not be able to afford the items, Holmes said.
Reach Gary Huffenberger at 937-556-5768.