What has the City of Elyria done to earn my support for
Issue 6? With all the cost-saving
measures you’ve put in place as Mayor, why is the City of Elyria still
struggling to provide basic city services?
These are the questions I am asked most often, so I wanted to take a
moment to share with you how we arrived at this point, what we have done, and
what we still need to do to improve our situation. When I took office in January of 2012, I knew
finances would be the biggest challenge, so we became very proactive in cutting
costs, creating efficiencies, growing the tax base and leveraging federal and
state grant funds.
We initiated a Voluntary Performance Audit through the State
that has helped yield, so far, over $2.3 million in cost-savings. With the cooperation of our employees and
City Council we have managed to save money by (1) reducing 50 positions,
including 32 fulltime positions; (2) consolidating departments, (3) rebidding
vendor contracts, (4) increasing employee contributions to healthcare, (5)
reducing longevity for new hires, (6) negotiating pay freezes, (7) reducing
non-emergency cars and cell phones, (8) reducing absenteeism, (9) focusing on
safety and wellness to reduce sick leave and other associated costs, (10)
joining energy cooperatives, and more.
And please note, in the interest of safety, we have not reduced the
number of police officers. In fact, we
have expanded the Narcotics and Neighborhood Impact Unit to help fight
drug-related crime. The fire department
has been reduced by 10 front-line firefighters to 60 from 70 – just enough to
keep three fire stations open to serve 21 square miles.
At the same time we are savings costs, we have also put in
place a new Economic Development Plan to help grow the tax base. New incentives are being offered, a new
Elyria Community Improvement Corporation is in place, design review
requirements have been relaxed, and a grant-funded market analysis and
redevelopment plan for our business districts has been completed. In the last 24 months over 350 jobs have been
created. And yes, despite our best
efforts to retain Bendix with a tax incentive proposal that reduced their
rebuilding costs in Elyria by over 40 percent, we will lose 400 jobs and
$800,000 in tax revenue when they depart in two years.
To help make up for that loss and better serve businesses
the City is currently working with the manufacturing community in the Taylor
Street area to increase water pressure and make other improvements conducive to
business support and expansion. Downtown
is experiencing major investment – 15 new businesses and nonprofits have
relocated there in the last 18 months, two new restaurants will open in 2016,
and more construction and renovation projects are scheduled. And the Mayor’s Office is working with Midway
Mall leadership to reconfigure the space to help retain and expand retail and
other mixed uses. Details are available
by viewing Cable Channel 12 or the city of Elyria website at www.cityofelyria.org.
An aggressive approach to leveraging federal and state funds
has allowed the City to move forward with some larger infrastructure projects,
with over $46 million in bridge, road, and sewer investments in the last four
years. Some of the most visible projects
have included the reconfiguration of the Midway area with SR 57 and the removal
of the 49th Street Bridge, replacement of Middle Avenue, and many
water main and other sewer improvements.
Unfortunately, federal and state funds are not available for neighborhood-level
street repaving that must be paid for out of the General Fund.
Yet, despite our best efforts to run our city as customer-
and business- friendly, and as lean as possible, and even though Elyria’s
income tax collections have risen back to pre-recession levels, we are not able
to maintain or improve services where they are needed most – and here is
why.
The State of Ohio’s tax policies are eating up Elyria’s
cost-savings. First, in 2011, faced with
an $8 million state deficit, Governor John Kasich proposed a state budget that
cut 25 percent of local government funding the following year and another 25
percent in 2013, compared to 2011 funding.
By 2015, Elyria’s annual share of the Local Government Fund has been
reduced to $1,382,872.00 – a net loss of
$1,482,058.00 million from pre-recession levels.
Second, the state legislature, under Governor Bob Taft,
began phasing out the Tangible Personal Property Tax. This tax, which went to local governments and
schools on business equipment and inventories, has been steadily declining and
in 2015, Elyria saw no financial benefit from this former tax. Legislators replaced the Tangible Personal
Property Tax with a Commercial Activity Tax on businesses gross receipts. Unfortunately, municipalities and schools
must share those proceeds with the State and those revenues have also been
declining.
Third, Kasich’s 2011 abolishment of the Estate Tax was a
terrible blow to Elyria as well as all local governments in Ohio. Up until 2012, local governments throughout
the State received about 64 percent of the $231 million in annual revenue from
the Estate Tax. During the five-year
period prior to the repeal of the Estate Tax, Elyria averaged $717,942 annually
from this revenue source. In 2015, Elyria
received only $7,162 in Estate Tax revenue and that annual revenue will soon be
zero.
Fourth, House Bill 5 which went into effect this year, will
also have detrimental financial effects on Elyria. Designed to streamline the State’s income tax
collection system, the impact of mandated statewide standards that local
governments must follow are likely to reduce municipal income tax revenue
further. Under the new system,
businesses with an annual income of $500,000 or less would only be charged municipal
income tax in the city where they are headquartered. Workers on a job in a different city don’t
have to start paying income tax in that municipality during the first 20 days
there; the previous law allowed 12 days. Also, local governments like Elyria
can no longer tax certain retirement accounts of higher paid company
executives.
At the local level, the City of Elyria is collecting less
income tax because of a Charter Amendment passed in 2007. The amendment eliminated the City of Elyria’s
ability to tax Elyria residents who work outside the city unless the city they
work in has a higher tax rate. Under
these circumstances, the residents only pay the difference. Moreover, after passage of the Charter
Amendment in 2007, City Council lost the ability to reduce the credit in times
of economic crisis, thus limiting the City’s ability to generate emergency
revenue.
So, what must we do?
Please know, the Brinda Administration will continue to streamline and
reduce costs whenever possible. We will
also continue to institute our tax growth strategy with our new Economic
Development Plan and incentives and vigorously pursue grant dollars. And as your Mayor, I will join other Mayors
in Ohio who are convening to change the state tax policy to help urban core
cities recover. But we must also take
the next steps as a community to support a modest increase in taxes to make up
the gap between the cost-savings we have created and the state tax policies
that are reducing local government funding. The tax burden for vital services
has been largely shifted by the State of Ohio to the local level. The State is not going to fix Elyria’s
economy or fund city services – only Elyrians can do that. Since 2012, records by the Secretary of
State’s Office show that there have been 105 requests for additional tax
revenue among Ohio cities and villages.
Elyria has not passed a new tax issue in 24 years and has one of the
lowest tax rates in the State. Even with
passage of Issue 6, taking Elyria’s tax rate from 1.75 to 2.25, Elyria’s tax
rate will still be lower than many neighboring communities including Lorain and
Oberlin.
If Elyrians want a safer community with more, well-equipped
police officers; well-paved streets; quality basic city services; a maintained
park system, and more resources focused on economic development – then we will
have to increase taxes. We all know in
this economy, if you’re not moving forward, you’re moving backward. Elyria cannot afford to move backward – and
neither can our residents or businesses.
Passage of Issue 6 is critical to Elyria’s ability to be
competitive. Our safety depends on
it. Our property values depend on
it. Our quality of life depends on
it.
The City of Elyria is doing its part. We have worked hard to earn taxpayer
support. Now we need Elyrians to show
their pride, step up to the plate, and prove to themselves and the region that
we are worth the investment. Our future
depends on it.
Holly C. Brinda, Mayor
City of Elyria
131 Court Street
Elyria, Ohio 44035
(440) 326-1402
