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With few revenue options, city must cut

Published 12:00am Sunday, January 8, 2012

It is that time of year again when things get frosty and everything seems to get cooled off.

No, I don’t mean winter. I mean Ironton government’s budget talks.

The city is facing some difficult choices as it tries to bridge the gap between not-so-gradually declining revenue and rapidly growing expenses.

Lots of ideas will kicked around in coming weeks.

Revenue may the hardest area to move the needle, so to speak, but it is the easiest to discuss because there are really only two options.

Reciprocity. It sounds like a word that could trip someone up in a spelling contest but it could actually spell relief for the city of Ironton.

Or at least it could if the city council takes the time to fully understand it and then, most importantly, shows the courage to make an unpopular decision.

This two dollar word becomes an issue every few years when the city’s dollars start to run short. That is the case once again.

And, as councilman Mike Lutz pointed out, reciprocity could be a solution.

It is somewhat confusing but here are the nuts and bolts.

Ironton has a 1 percent income tax, the highest percentage allowed unless changed by a vote of the people. Results of recent tax levies show that is unlikely to happen so that option shouldn’t be looked at as a viable solution, for that and other reasons.

Under Ohio law, individuals pay income taxes where they work but can also be asked to pay this tax in the community in which they live.

Ironton has had a reciprocity law in place for decades that many believe was instituted to avoid double taxation in a Tri-State area that means a significant number of residents will likely work in another city or state.

This law outlines that citizens who work in a municipality that has an income tax up to 1 percent would be absolved of paying the city of Ironton’s 1 percent income tax as well.

In 2004, with a split vote by the city council, the reciprocity agreement was reduced to a 50-percent plan. This mean that those working in communities with an income tax — Ashland, Ky., and Portsmouth are two good examples — are required to pay 50 percent of Ironton’s income tax.

The theory behind this approach was that individuals who live inside the city but work elsewhere should still be required to help the city operate and pay for services that don’t have specific fees associated with them.

Police protection and having streets to drive on are two key examples.

The other option to raise revenue is to increase the city’s municipal fee currently set at $8.

This is an equally unpopular plan but may the most fair because it requires virtually all residents to pay for the services they receive, unlike either of the income tax changes that would put the burden solely on those who are working. Retirees and those receiving government assistance have to be part of the solution, too.

Expenses become a far harder discussion because almost all the changes will impact the level and quality of services.

The city has to look at its employees’ benefit packages. This should be the top priority. Employees only pay 5 percent for health insurance, an almost unheard of number. This has to be increased to at least 15 percent, which is still low even among government standards.

Some of the other changes being talked about include using 911 for police dispatching, merging health departments and more.

None of these changes will be easy, but everything has to be on the table. The city has to live within its means.

Revenue growth has to be part of the equation but only after the city has done everything it can to get its expenses in order.

 

Michael Caldwell is publisher of The Tribune. To reach him, call (740) 532-1445 ext. 24 or by e-mail at mike.caldwell@irontontribune.com.

 

  1. mickakers

    t.bum; Where you been? Great post!! My compliments.

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  2. t.bum

    we need to create revenue options. Can the city get a reducd garbage rate by limiting the free dumping to twice a year and limit the amount of garbage picked up at each residence. Does the city even have to pay for garbage pick up? Can we reduce the rate by recycling?
    Can Ironton get a government grant for a recycling plant or a plant that produces a product from recycled material? Provide jobs for people and increse income tax revenue.
    Hanging Rock has an ATV trail that is not being utilized to its fullest potential. Races and contests could be organized that would benefit both Ironton and Hanging Rock. ATV, motorcross, and mountain biking events would bring people into the area. How about hill climbing contests as well. These are big sports and people love to watch and spend money.
    How about appealing to the gun and archery enthusiast. The state park at the lake has an archery trail that could be used to make money for the park and for Ironton. How about inviting Hiking clubs into the Ironton area? Provide a challenge or something for them to come to Ironton and provide a tourism revenue by spending their money here.
    the state park even has a horse trail. Is that being used to bring in tourist? Tourism will bring in money to Ironton.
    How about helping local area craftspeople in selling their craft to the public. There are many talented individuals who create a varity of high quality goods and crafts. Instead of fighting the hillbilly label we can make it a positve label that works for Ironton and the local businesses and maybe even create many small businesses.
    Ironton has the loction. On the river, major highway access, and airports. We need to use our location and existing resources to provide a solution. Ironton has a lot to offer if we can make tourist come into our town.
    Bike rally is a good start. Lots of people come to town, spend their money, and leave without a leaving a huge mess. Gus Macker, may have to rethink that one or provide more monitoring of the crowd. Can we utilize more volunteer workers for such events to lower the cost on the city. Volunteers will work if they can get a little perk provided to them.
    Ironton was a great place to grow up and can be that way again with a little creative thinking. Think outside the box. Maybe we should look at other small towns and how they have handled their declining revenue situation. Look beyond the state, look at small towns on the national level. Consider national trends in interests and business. We can bring Ironton back to a town that everyone is proud to live in.

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  3. mickakers

    Michael Caldwell; Your comment; “Employees only pay 5 percent for health insurance, an almost unheard of number. This has to be increased to at least 15 percent.” In actuality, you are suggesting that City employees take a 10 per cent cut in their pay, considering, Health Benefits are part of their wages. The majority of people (even the employees) fail to realize that, it is a trade-off, wages or benefits. It is a package deal. Otherwise, you and Mike Lutz are on the right track. My compliments.

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