Two income tax issues will be decided in next month’s general election, with one city seeking an increase and another offering to reduce its rate.
In Kent, officials are desperate to replace an 89-year-old Safety Administration Building by using money from a quarter-percent increase. Voters rejected the idea last year, but officials hope some changes to their plans will net a better response this fall.
Meanwhile, in Twinsburg, a $25 million carryover cushion has city officials feeling OK about the possibility that voters will repeal a previous quarter-percent hike that helped the city survive the loss of its largest employer.
Police Chief Michelle Lee and City Manager Dave Ruller welcomed about 50 people to an open house of the city’s safety building last week, hoping to win a few more votes for Issue 4.
The issue differs from last year’s failed attempt in that it has an end date: The city’s tax rate will go back to 2 percent once the new building is paid for.
It would cost about $18 million to replace the current building at Water Street and Haymaker Parkway. The income tax increase would generate about $1.2 million annually for a bond payment. Officials estimate the tax would be needed for about 25 years.
At this point, maintaining the building is more costly than rebuilding, officials have said. Studies have found the structure to be deficient in several areas, including the jail, electrical system, plumbing, fire safety and the heating and air-conditioning systems.
Lt. Jim Prusha said staff took residents on guided tours to show them the “dungeon-like” jail cells that fall below state mandates.
Visitors also had the opportunity to see water-damaged ceilings and the site of a roof cave-in, places where walls have bowed out of place, and how steps and the lack of an elevator keep the building out of compliance with disability laws.
After the tours, Lee and Ruller took questions from the visitors.
“There were some good questions,” Prusha said. “Like, ‘Are there grants available?’ The answer is no.”
The new building would be built next to the current one. That will keep the fire and police departments together on a single campus. The old building then would be demolished and the lot likely used for parking.
Because the tax is on income, officials have made the point that the increase would not affect retirees or seniors on fixed incomes. Those who earn $50,000 annually would pay $125 in additional tax annually.
Voters approved a quarter-percent income tax increase in 2009 to help the city weather the closing of the Chrysler Stamping Plant, where the loss of more than 1,000 jobs cost the city an average of $2.6 million a year.
Going to a 2.25 percent tax gave the city an additional $2.3 million in 2010, $3 million in 2011, $3.24 million last year, and $2.7 million so far this year.
But the city’s coffers hardly felt Chrysler’s departure. Several businesses have expanded or moved into town in the past four years, including the Cleveland Clinic’s Twinsburg Family Health and Surgery Center, with more than 300 jobs.
Verizon Wireless, Windstream Corp., AssuraMed, GE Energy, Rockwell Automation and a new nursing home have added hundreds of new jobs as well. Also, the renovated property of the former Chrysler plant — now called the Cornerstone Business Park — is giving the city a 165-acre canvas for attracting new business.
When the tax question was put to voters, officials said they would give them the option of ending it in four years. The city is not campaigning to keep the tax, and some officials have been vocal with their blessings to end it.
Economic Development Director Larry Finch went on record saying it’s better to have a 2 percent tax rate because its comparable to other communities vying for companies.
Because the city recovered so quickly from Chrysler’s departure, much of the new tax has enabled the city to bulk up its General Fund Reserve balance. It went from $5.7 million in 2009 to $22 million last year.
“Based on the city’s current cash position, I feel confident that the city will be able to sustain a healthy reserve balance for some years as we continue to operate lean,” Finance Director Karen Howse said.
Should the city need financial help again down the road, Howse said, officials have “proven to the community that they can be fiducially trusted and that they do keep their word.”