Voters in Mason will have the chance to thwart an “extreme deficit situation,” according to one council member, in the city’s safety, fire and EMS services budget this fall.
Mason City Council approved a charter amendment Monday that will go before voters on the Nov. 6 ballot.
The proposed ballot measure would add a 0.12 percent income tax on top of its existing 1 percent income tax, though only for nonresidents.
Anyone who works in Mason pays the current income tax, although Mason residents who work in another community with a 1 percent income tax don’t pay Mason’s income tax.
An estimated 21,000 people work in the city, which is home to more than 1,100 businesses. Sixty percent of people who pay Mason income taxes live outside the city, according to Councilman Tom Grossmann.
The fire income tax and the existing income tax would cost someone working 40 hours a week at $10 an hour $4.48 a week. That’s 48 cents a week more than what he or she pays now.
The proposed charter amendment also includes a property tax levy for fire/EMS not to exceed 5 mills.
The city has a 5-mill property tax levy for fore and EMS scheduled to expire at the end of 2013.
The 5-mill levy, which would take effect Jan. 1, 2014, would cost the owner of a $100,000 home about an extra $18 a year if council decided to take the full 5 mills.
The levy under the proposed charter amendment would cost a homeowner more than the existing levy because the new levy is adjusted for inflation.
It also gives City Council the flexibility to set the rate of the proposed levy and the fire income tax.
The proposed ballot measure took nearly a year to draft and included many “heated moments,” said Mason Mayor David Nichols.
Some of those exchanges spilled into Monday’s meeting.
Mason resident Tom Muennich, a former city councilman, admonished council members for the tax hike.
“It is unheard of for anyone to put taxes on just because of our inability to raise revenue,” he said. “We, the voters, have one recourse and that’s not to vote you back in.”
Several residents expressed disapproval of raising income taxes on people who work in Mason, but don’t live there.
“How is that fair and just for that increase to be handed off onto other people, who, quite frankly, don’t have a vote?,” asked Joey Dezenzo.
Council members also sparred over the income tax hike for fire/EMS services.
Councilman Victor Kidd said an income tax increase would create an “unnecessary controversy as an unfair, reoccurring tax policy in the city of Mason.”
“Increasing the earnings tax could be perceived as a slick political strategy having not passed the last tax levy,” he warned. “Increasing the earnings tax to fund fire services opens the door to other incremental increases, which leads us down a slippery slope.”
He also said that the city’s 1 percent income tax served as a recruiting point for new businesses.
Councilman Don Prince disagreed, arguing that Mason’s income tax rates are among the lowest in the region.
“I don’t think it will affect our ability to attract businesses,” he said. “Nobody gets to vote where they work unless they work where they live. Most communities do it that way.”
Councilman Rich Cox said the income tax hike on nonresidents would create a “clerical nightmare” for business owners by taxing resident and nonresident employees at two different rates.
He recommended eliminating the property tax and enacting a flat 0.25 percent income tax increase.
Grossman, however, said such a plan would create an unfair burden on working people, the majority of whom don’t live in Mason, he said.
The city responds to about twice as many fire calls at homes and apartments than at businesses, city statistics show.
“Shouldn’t people who own homes and use services pay for them?” he asked.
Despite cost-cutting measures, the current fire levy does not produce enough money to pay for the 33-member fire department, forcing the city to dip into a fire reserve fund, City Manager Eric Hansen said.
The fire department’s budget runs between $5 million and $6 million.
Exacerbating the department’s funding woes is the elimination of state personal property tax and reimbursement that decreased funding for the fire and EMS operations by more than 12 percent or $700,000 a year, said Hansen.
If voters reject the charter amendment this fall, Hansen said, “We reduce our services or we stabilize our revenues. And council would have to determine whether they want to go back and just change the services. … Or they go back and look at other revenue alternatives.”
Paul McKibben contributed
Posted in: City Council, Election, News |
Tags: Tags: 5-mill levy, ballot, charter amendment, city council, city manager, city of mason, david nichols, don prince, election, eric hansen, fire/ems, income tax, joey dezenzo, mason, nonresidents, property tax, revenues, safety services, tax increase, tom grossmann, tom munnich, tony cox, victor kidd
