By all measures, Tiffin's financial forecast for the next few years will be less than rosy. Current projections indicate we will have a $435,000 revenue shortfall next year, $825,000 in 2013 and almost $1 million in 2014. Most of this shortfall is driven by our legislators in Columbus, as they have eliminated local government funding, estate taxes and personal property taxes. Thus, those of us at the local level must find ways to cover this loss.
To date, Tiffin City Council has dealt with the financial pressures by scrutinizing just the expense side of the ledger. This can only go so far. We must also take a look at ways in which we can enhance the revenue side of the equation. Otherwise, services will greatly suffer to the point of adversely impacting each and every one of us.
If nothing is done and local revenue continues to dry up, our safety service forces will be very thinly manned. Response time for ambulance and fire service will approach the unacceptable. There will not be a sufficient number of policemen on the streets to adequately protect our homes and families. Resources will be scarce to deal with natural events. Street maintenance will be impacted. Many streets will not be plowed or salted in a timely manner after a major snowfall. Public works will not have the staffing to handle other crisis situations, much less maintain the fall leaf pick-up program. And, our parks and rights-of-way will certainly fall into a state of extreme disrepair.
This is obviously NOT the direction any one of us wants to go. We must do everything possible to plug the financial gap. Working hard to maintain current service levels is imperative. Otherwise, the inevitable continual erosion will be almost impossible to restore in the future.
One of the suggestions offered during a recent council Committee of the Whole meeting was a revisiting of our policy that allows tax reciprocity to those residents who work outside of the city. Currently, anyone employed in another community that levies a tax on income is allowed to deduct for those payments against their Tiffin income tax. In many situations, they have enough deductions to totally offset any payment to Tiffin.
As an example, the city of Marion has an income tax rate that is the same as ours 1.75 percent. If a Tiffin resident works there and makes $40,000 per year, he pays that city $700 in income tax. When he applies the Marion tax deduction to his Tiffin income tax obligations, he pays no Tiffin income tax. In other localities where the income tax rate is less than ours, we get the difference between what is paid there and what is owed here.
In reality, there are many people living here and working elsewhere who enjoy the benefits of police and fire protection, use of the public parks and recreation programs, snow plowing on their street, the fireworks display and many other amenities for free or at greatly reduced tax rates. These benefits are funded by the taxes of neighbors who work within the city of Tiffin.
Many other cities throughout Ohio that previously allowed similar tax deductions now are scaling back - or eliminating - any tax deduction allowance. This is being done to maintain their current service standards. Furthermore, as long as we allow full credit for taxes paid elsewhere, we are additionally penalized every time another community raises their income tax rate. For every additional dollar another city collects from a Tiffin resident, we lose that dollar here.
We recognize much of the funding burdens have been shifted from the state to local governments. Why? The state legislature could not balance its own budget without making many cuts in services. Now it remains for us at the local level to find solutions. No one wants to pay any more than necessary. But if we are to remain a viable and safe community, we will all be forced to make adjustments.
It is our belief there is a middle ground on income tax credits. There is discussion among various council members on revising our reciprocity formula. We believe the city of Tiffin should allow some scaled-back deduction for taxes paid to other communities. Council still is discussing the specifics.
One thing is certain, and, despite arguments to the contrary: If we do not address strengthening the revenue side of the ledger, our city services will greatly decline. This will be evidenced by decaying infrastructure, increases in crime, higher insurance rates and greater difficulty in attracting new businesses and industry to our community.
Respectfully submitted,
Lori Ritzler, Tiffin City Council Second Ward
Mark Hayes, councilman at large
Jim Boroff, mayor, city of Tiffin
