The city income tax proposal didn’t pass. In fact, it got beat bad—712 votes for and 1,720 against.
Unfortunately, the city still needs $39 million it doesn’t have to repair its roads.
The city income tax would have established a mechanism through which the city could stockpile a road rebuilding fund. But with the proposal’s defeat, the city is back where it started—with crumbling roads and no money to rebuild them. So what can the city do now?
There are several options to consider. None of them are perfect solutions, and in fact they are all messier than the income tax.
Here are three:
1. An increase—a significant increase—in property taxes could raise the revenue to cover road reconstruction. The income tax would have raised $1.1 million a year. To match that, the city would have to levy 7.3 millages on Hillsdale residents. With 13.25 mills, the city could pay for the road problem in 20 years.
The unfortunate side-effect of a property tax, however, is that it affects the unemployed. The income tax is much better in this regard. You must have an income to have your income taxed.
2. The city could cut its budget to produce revenue. The city budget is $7.7 million, which comes out to about $950 per city resident. Where should the cuts come from?
The Hillsdale City Police Department is the single-largest expenditure for the city, consuming $1.3 million. Do Hillsdale’s finest really need two full-time and two part-time crossing guards? How necessary is the $7,000 set aside for the “Police Department Public Relations Fund?”
Wherever the cuts would come from, they would be painful. The city budget is tight and only losing revenue as the economy continues to limp toward recovery. Property values—and therefore property taxes, the city’s largest source of income—continue to decline.
Should the city cut $320,000 from Dial-A-Ride, the city’s stand-by taxi service, relied upon by the elderly and disabled? Maybe their neighbors should give them a ride.
3. The city could do nothing. The roads can only be repaired for so long. Eventually the base below the road will crumble and the paved roads will become dirt roads.
The city currently pays for road reconstruction by drawing what money it can from its general fund. It is estimated that 2088 is the earliest the city can raise the $39 million it needs to repair all its roads.
And that’s OK if you want to do it that way.