Grand Rapids Mayor George Heartwell has characterized next week’s ballot proposal to temporarily increase the city’s income tax as being critically important for the city’s immediate financial future. Four other city commissioners told the Business Journal that they readily agree with the mayor’s assessment. They also said they see the ballot measure as a necessary time buyer, but not as a cure.
“The mayor, city manager, city commission, executive staff and city bargaining leadership units have expressed support for and the need for the revenue that would be generated from the slight revenue increase from the income tax ballot request. A ‘yes’ vote will ensure additional funds for police, fire, and parks and recreation. It does not resolve the additional $27-plus million deficit that we face,” said Elias Lumpkins, 3rd Ward commissioner.
“The projected deficit continues to grow and minus a financial miracle, will continue to be with us. Voters’ approval of the ballot issue will assist us, buy some time for the city manager to continue to transform and reshape city government. The five-year sunset provision on the ballot provides assurance, accountability and follow through by the city manager and city commission. Voters are encouraged to vote ‘yes’ and if we don’t deliver on our priorities, vote us out of office,” Lumpkins added.
The request asks registered city voters on May 4 to raise the income tax for five years from 1.3 percent to 1.5 percent for residents and from 0.65 percent to 0.75 percent for non-residents who work in the city. City Manager Greg Sundstrom estimated that $7.5 million in new revenue would be generated from the increase for each of those five years and would go to the general fund, which pays for most of the city’s services including police and fire.
If the measure is approved, Sundstrom said the city would call back 10 police officers and 15 firefighters.
“It’s critical if the taxpayers want the very basic level of services we are able to provide right now. The revenue from the ballot proposal will allow us to maintain essential services as we move forward on the real work of restructuring and reforming city government,” said 1st Ward Commissioner David Shaffer.
“This is about buying some time, we cannot transform overnight,” Shaffer also said.
The reason the tax-increase request is for five years Sundstrom said, is that it would likely take the city that amount of time to change the way it delivers its services.
“I think it is important to focus not just on the proposed income tax increase, having a plan of which the end result will be a restructured and renewed service model is what’s critical. A temporary revenue increase will provide time to implement permanent solutions to stabilize government and city services,” said Rosalynn Bliss, 2nd Ward commissioner.
The ballot proposal also asks voters to amend the city’s charter. As it now stands, the charter defines a workday for city employees as being eight hours. Amending it would allow the city to move away from the five-day, 40-hour week it now has. Sundstrom said there isn’t a plan in place to do that now, but he also mentioned that moving to a four-day, 9.5 hour workweek would save the city about 5 percent on payroll costs. Still, the tax hike is the issue that will drive voters to the polls.
“Although the city commission made the decision to put this on the ballot before I was appointed, after attending several budget meetings I believe that it would have been presumptuous of the city commission not to bring this to the ballot,” said 2nd Ward Commissioner Ruth Kelly, the commission’s newest member.
“Given the economic conditions and the fact that the state revenue sharing has not come through as promised, I think that the residents must be given an opportunity to make choices on this question. No one has been left untouched by this economic downturn; residents or municipalities,” said Kelly. “We need to hear from the residents regarding these difficult choices between current demand for city services and their ability to pay.”