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Macedonia seeks tax at difficult time

By admin Published: October 5, 2010

By Paula Schleis
Beacon Journal staff writer

Not that it's ever preferable to ask voters for money, but Macedonia's request for an additional quarter-percent income tax increase couldn't come at a more complicated time.

Since the start of the recession in 2007, 20 percent of the jobs in this northern Summit County community have evaporated, taking nearly $5 million in income tax revenue with them.

Finance Director Loren Sengstock has warned City Council that another $1.5 million hit is possible next year, and that 43 of the city's 169 employees would need to be laid off to balance the books at the end of 2011.

That number would include half the police force, half the fire department and half the service department.

So knowing the city needs a tax increase just to maintain current services, what's a mayor to say when the local school district asks him to support its 6.5-mill levy on the same ballot Nov. 2?

''They're one of our top five employers,'' Mayor Don Kuchta says of Nordonia Hills Schools. ''If they lose their levy and teachers get laid off, that's no good for us. We lose more income tax.''

And what's he to do when the Akron Metropolitan Area Transportation Study (AMATS) calls him to a meeting to discuss a resolution supporting a federal gas tax hike to fund road repairs?

''Fixing roads creates jobs,'' Kuchta says.

And what about the fact that Congress will not decide whether to extend a federal income tax cut until after the election, meaning taxpayers could face a tax hike of $2,000 or more next year?

Kuchta shrugs and shakes his head, and Sengstock gives voice to his mayor's frustration:

''We have no control over federal or state government. But voters have control over what we do locally, and they have to prioritize,'' he said.

Still, in times like these, city officials always hope state and federal authorities will put their needs on the back burner while local governments struggle to get back on their feet.

''We need them to buy us enough time to recover,'' Sengstock said.

Macedonia is asking for a three-year, quarter-percent increase in the city's income tax rate, which is currently 2 percent. The measure also would cap the income tax credit at 2 percent.

That means virtually all employed residents would pay the increase, even if they work in communities like Akron, where they already pay 2.25 percent.

The increase would generate about $1.4 million a year.

Voters also are being asked to renew an expiring property tax levy that generates less than $600,000 a year. The renewal would not result in new taxes to homeowners.

For the first time, the city will promote the issue with signs on city property.

Kuchta said legal counsel advised the signs are legal as long as they don't ask voters to approve the issues but merely educate voters about their existence. The 4-foot by 8-foot signs will read: ''To support city services, Issues 35 and 36.''

Meanwhile, a political action committee formed to advocate for the taxes has launched a Web site (http://strongermacedonia.com) and is collecting donations to pay for mailers and newspaper ads.

The group has also scheduled a town hall to present the city's needs and take questions at 7 p.m. Oct. 12 at City Hall.

As city officials hope for the best but plan for the worst, Kuchta and Sengstock have been researching their options should either tax issue fail.

Kuchta said the city has a $500,000 emergency fund that council has refused to touch so far but could be used to postpone layoffs for up to six months. Still, that won't get the city through the end of next year.

Kuchta said he probably would refuse to lay off safety personnel altogether.

The forces are already down 21 percent, so to lose half of what remains of the police and fire departments would put them at 40 percent of where they were a few years ago.

A reduction in safety forces also threatens other revenue, Kuchta said, because the EMS contracts to provide services to other communities and police officers write the traffic tickets the mayor's court processes.

If it comes to that, Kuchta said, ''I'd rather the state take over.''

In such a case, a commission would be formed with three city positions and nine state representatives, with the mission of making recommendations to City Council on how to balance the budget. If City Council doesn't act, the state could take the city to court to force action, Sengstock said.

''We're dismantling the city,'' Sengstock said. ''We're at the core of city services, and beyond that core you have to ask if you can continue to provide services at all.''


Paula Schleis can be reached at 330-996-3741 or pschleis@thebeaconjournal.com. Follow her on Twitter at http://twitter.com/paulaschleis.
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