Sunday, February 7, 2010

Does A Temporary Tax Mean a Temporary Deficit?

Mayor Bell wants the voters to know that the temporary .25 increase in the city income tax he is proposing to close the $44 million city budge gap will end in 2012, at least according to the language in the proposed legislation. He is quoted in today's Toledo Blade as saying, "When I say temporary, I mean temporary". 

 I believe that Mayor is a decent person and probably believes what he says here. I am not so sure that the ever growing level of budget shortfalls will be over by December 31, 2012 as touted however. While I see some honest effort at nibbling on the edges of the city's problem, there is nothing that I can see that makes a sweeping change to local government to reduce the sizable amount of difference between revenue and spending that appears annually in Toledo. 

One time real estate sales might help this year, though property values seem to indicate that in many cases the city will barely recover money still owed on such property. Selling the parking garages, which appears to be the city's largest asset, has been pointed out to be much more complicated (and less profitable) by Lisa Renee in Glass City Jungle

The bottom line with such an approach however is that these properties are one time sales. Once their recovered value has entered onto the city's ledger, they are gone forever. The debt that the city incurs is a returning problem, and if they solve this year's by these sales there is no provision for that which will undoubtedly occur next year or the year after. 

Other revenue sources such as the red light cameras and trash fees appear to be equally problematic. Maggie Thurber does a great job of showing the current proposed thuggery of the city regarding red light camera revenues (as well as a returning ballot effort to ban this potential source), and the trash fee situation is still making its way through the courts. 

What we know from history however, is that the city's predilection for spending more than its revenue allows is anything but temporary. As a consequence, it is probably naive at best and disingenuous at worst to assume that the proposed temporary tax increase would in fact be one.


Hooda Thunkit (Dave Zawodny) said...


That's why I say, show us some significant cuts and permanent reductions in spending BEFORE coming to us with a tax increase.

Only by demonstrating that Toledo has their spending under control can they hope to sell us on the idea of paying more "temporary" taxes...

Tim Higgins said...

You are right of course Dave and I know that there were deadlines to consider in getting something on the ballot in May, but the Mayor and his CSI Task Force have done a poor job of communicating and perhaps an even poorer one at the "out of the box" thinking that was their goal.

Unless this changes between now and May, I fear that even Toledo (to whom no taxation seems ever enough) might reject further abuse.

Roland Hansen said...

I suspect a huge public wave of political backlash is on its way.

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