Wednesday, September 29th, 2010
By William Kincaid
Local professionals hear reasons Celina wants income tax hike
CELINA - Downtown manager Deb Borns on Tuesday said it's important that people disseminate the facts - and combat misinformation - about the city's proposed income tax levy.
City real estate agents, business owners and others were invited by Borns to the Potter House on Main to learn why the city is seeking to increase its income tax from 1 percent to 1.5 percent. Residents will vote on the increase Nov. 2.
"People are always asking me questions," Borns said. "This is a great opportunity."
Celina Planning and Community Development Director Kent Bryan spoke about the city's finances, once again underscoring that the city's general fund is the problem.
The city next year is facing a deficit of $1.056 million in its general fund, which largely pays for the operation of the fire and police departments. The city balanced that fund this year by using $500,000 in carryover funds and $300,000 from the fire department's truck fund - none of which will be available for the 2011 budget.
If passed, the levy would bring in an additional $1.5 million a year that would be used to maintain the current police and fire department levels and eventually build back the fire truck fund.
Attendee Toni Slusser said the problem may be convincing people that the additional revenue will just go to fire and police services.
"It's not a windfall in terms of today's dollars," Bryan said about expected additional revenue if the levy passes.
Bryan said he is often asked why the city did not build a cash balance.
According to his information, the city experienced cash balance amounts as high as $1.3 million in 2006 to 2008. But then the recession hit, forcing the city to use that carryover to balance its budget in 2009 and 2010.
"We did our job. We built a cash balance," he said.
Bryan also said the city has a total of 131 funds, 42 active. Due to state accounting laws, the city cannot simply transfer money from healthier accounts, such as the electric, water and wastewater funds, into the troubled general fund.
"And that's a real misunderstanding," Bryan said.
He also stressed that the city's recent infrastructure projects are not the reason for the general fund's depletion. The true culprit is the economy and decreased income tax revenue the last three years, Bryan said.
"The projects have become the big focal point for a lot of people," he added.
According to Bryan's information, the city has pursued 79 capital projects totaling $30.3 million since 2004. Of that total, the general fund has provided 2.4 percent, or $717,500, with the majority of financing coming from federal and state grants, Tax Increment Financing (TIF) districts and utility funds.
Borns said she has talked with people from St. Marys who are amazed at Celina's progressive attitude toward infrastructure improvements, while another attendee said the city's crumbling roads should have been addressed 20 years ago.
Councilman Jeff Larmore, who also attended the Tuesday morning meeting, said St. Marys has had a 1.5 percent income tax for 25 years, allowing it to have a large carryover.
"St. Marys is a little bit ahead of the game," he said.
At the conclusion of the meeting, Borns exhorted attendees to tell others about the information, pointing out that people may be more inclined to listen to citizens other than Bryan, Mayor Sharon LaRue and Police Chief Dave Slusser.
Mistrust in government at both the national and state level may have filtered into the city, she said.
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