The Hillsdale City Council couldn’t agree on how to smooth out the city’s road paving problem, but they could agree on at least one thing at March 5’s meeting:
“We need to move on something,” councilwoman Ruth Brown said.
At the last meeting on Feb. 20, the council was presented with the results of a study that determined if a voter-approved, city income tax could be a feasible solution to Hillsdale’s lack of road renovation funds. The tax would be, at most, 1 percent for city residents and .5 percent for commuters.
Municipal Analytics, the firm that conducted the study, estimated the city needs $39 million worth of road renovation. The income tax could generate $1.1 million per year of net income for the city. In other words, it would take 35 years to reconstruct the roads.
The city currently has no permanent means of paying for road repair. However, the council must adopt an ordinance to place the income tax, or any other large fundraising endeavor, on the ballot for voters.
While some on the council supported passing an ordinance on Monday, others wanted to wait and gauge public opinion before they move forward.
Brown said in the last two weeks she had asked voters from her ward if they were in favor of the income tax. Of the 120 people she surveyed, she said only one was in favor of it.
“The voters are sending us a message,” she said. “They don’t want the income tax.”
Instead, Brown said she would be in favor of a millage increase or special assessment.
Both were alternatives Municipal Analytics discussed in their presentation to the city.
The city would require 7.3 millage increase to raise as much as the income tax in one year and 13.52 mils to raise the entire $39 million over 20 years.
Councilman Casey Sullivan said he was in favor of the income tax over a millage increase.
“It’s going to take something out of your wallet, [but] at least an income tax is flexible,” he said.
The income tax would be shared by both city residents and commuters who, Sullivan said, use the road as much as residents and should help pay for it. The millages would be paid solely by city residents.
Councilman Brian Watkins also supported the income tax for its flexibility.
Because they don’t earn income, unemployed people in the area would not be affected by the tax, he said.
“If my property tax goes up and I lose my job, well, there goes my house,” Watkins said.
The feasibility study also looked at the special assessment option.
Under the special assessment, city residents would pay for the road directly adjacent to their property from money put up by the city. Residents would be required to pay back the money –– in addition to their property taxes –– over a fixed period of time.
Rebuilding Hillsdale’s roads will cost roughly $1 million per mile, the study said, or about $190 per square foot. The cost for the average residential lot would range from $9,500 to $11,400, the study said.
Watkins said that businesses and tax-exempt organizations that own a lot of property, including Hillsdale College and the Hillsdale Community Health Center, would be burdened with a large amount of road renovation responsibility.
“I can’t even imagine what they’d be paying,” Watkins said.
Also, the city would need to have the money to give to city residents for the special assessments. The reason the city is looking for alternative funding for road reconstruction is because the city doesn’t have money for it, City Manager Linda Brown said.
“If the city has the money to front, just do it and be done with it,” Linda Brown said.
The last choice the study presented the city with was to do nothing and let current funding methods –– a combination of pulling money from the general fund and applying for state grants –– continue.
“There is no easy way besides a winning lottery ticket someone wants to donate to the city,” Watkins said.
The council decided to postpone making a decision on adopting an ordinance for the tax.
Instead, they commissioned Linda Brown to begin developing a system of instruction for city residents to become educated on the tax. That would include bringing Municipal Analytics back to Hillsdale to present their information in a larger forum than City Council meetings.
Councilwoman Mary Wolfram agreed the public needed to become better informed on the pros and cons of the income tax. However, she cautioned the council against taking too long to solve the city’s lack of road funds
“We can go forward and do a series of press conference, town hall meeting kind of events,” Wolfram said, “…but we need to be mindful if we want to put something on the November ballot –– we need to adopt an ordinance.”
