Marion’s dwindling tax revenue looks to be a continued point of contention among local officials.
At the State of the City, Mayor Jess Alumbaugh presented his case for raising taxes in order to keep the city’s public services financially afloat. Citing advice set forth by financial reports, Alumbaugh views a tax increase for the city as a necessary evil.
“Standard & Poor sent a letter that said the Marion City Council needs to address the issue of raising taxes,” the mayor said. “I have Umbaugh & Associates (the city’s financial adviser) saying the city of Marion needs revenue. Do we really want to cut public safety?”
The actual power to raise taxes rests with the city council and council members have pushed back on potential tax hikes.
“It’s foolish for the mayor to talk about taxes when he doesn’t have the authority in which to do so,” said City Council President Brad Luzadder. “It would be presumptuous to think of anything until city officials have had time to sit down and work through that.”
Other city council members defended the council’s exclusive right to consider the question of taxes.
“I have no idea what the mayor is talking about saying to raise taxes because he doesn’t do these things on his own,” said City Council member Lynn Johnson.
The Umbaugh & Associates report was also criticized by Johnson, who said the mayor “gave us no increasing revenue options other than to raise taxes on the citizens of Marion and Grant County. Raising taxes is your only option, is your only suggestion?”
The Comprehensive Financial Plan was prepared by the firm last year, to which the city paid $100,000 for. The plan, which detailed nine possible scenarios on how the city could raise money and gave projected financial outlooks for the city’s various funds, was presented to the council in August. Additional revenue options included an additional income tax which would net the city an additional $5.39 million a year, a payment in lieu of taxes on Marion Utilities, a wheel tax and a food a beverage tax. It was largely ignored when the council prepared the city’s 2018 budget.
City Council members largely pointed to the city’s debt structure and interest payments as the principle factor limiting revenue.
“The next step is to quit denying that we have a debt problem,” said Council member Steve Henderson. “It’s like an alcoholic that continues to drink that can’t admit he’s an alcoholic.”
Mayor Alumbaugh contends the maintenance of public services will be necessary in order to attract businesses downtown. Increasing funds available to remodel downtown are also part of the mayor’s plan to appeal to building companies that will hopefully provide apartments for a future presence of Indiana Wesleyan University students in the city.
“If you’re not taking care of your infrastructure and basic needs you’re not attracting anyone,” Alumbaugh said. “I think the way to get businesses to come is to improve the quality of life and quality of place. If people see a city that looks healthy again, it helps spur businesses.”
However, Henderson was not convinced this logic is the best approach for attracting new investment to Marion, saying “you can have all the buildings and infrastructure you can have, but if we’re in this kind of a debt mess, that’s the first thing that pops up to new investors.”
“This administration is doing nothing to cut the debt, reduce the debt or restructure the debt,” Johnson added.
Alumbaugh’s do-or-die warning on raising taxes to save public services does have some backing at the county level. Jim McWhirt, president of the County Council, stated he wants local officials “to put the politics side away” in order to address the reality of diminishing public service funds.
“Nobody wants to raise taxes,” McWhirt said, “but it’s important for the people of the county and city to accept the fact that they have to agree to accept less in service, or agree to supply more tax dollars to maintain it. That’s just the bottom line.”
While Alumbaugh recognizes the city council’s role in raising taxes, he wishes to “sound the voice to the community” and make clear “if you don’t do something, your services are going to decline.”
“We’ve got checks and balances going on here,” Johnson said. “He’s free to say whatever he wants to say...but we need to remind everyone these are things that are a combined effort. It’s not something he alone stands to do.”
Though the political factions continue to disagree, all those involved seem in agreement about the pressing need for action.
“If you really want to see where Marion ends up in the future,” Henderson said, “all you have to do is go back 10 years and look at Flint, Michigan...look how things went. We probably have more debt than they do.”