The shell game continues: more taxation is not the answer

How do we make sure our region goes belly-up? Keep raising taxes to cover the mistakes of our leaders.

We have too many municipalities, too many different taxation districts, too many different rules and WAY too many Chiefs for an area that is shrinking.

Why did Reynolds & Reynolds move from Dayton to Kettering? Maybe the instant .5% raise for those not living in Dayton or Oakwood. There is no excuse for the hodge-podge system of taxation we have in Montgomery County.

And now, Miamisburg, is asking to boost their rate to match Dayton’s:

Miamisburg City Council is placing a 0.5 percent income tax increase on the May 4 ballot.

The council voted Tuesday to approve the tax increase.

The city’s current 1.75 percent income tax has been in effect since 1977 and is the largest source of revenue for the city.

“Our revenue sources are simply not keeping up with the cost of providing services, and the current economic downturn has only magnified the problem,” said Mayor Dick Church Jr. “With no reasonable expectation that the economy will rebound soon, the city has two choices — initiate deep cuts in public services, or pursue a revenue increase that will maintain police, fire/EMS and other essential services.”

Income taxes are paid to Miamisburg by people who earn wages within city limits.

City Manager Keith Johnson estimates that about 70 percent of residents will not be affected by the proposed rate change.

via Miamisburg places income tax increase on May 4 ballot.

Their logic is the same as Dayton’s – the tax will mostly be collected from people who can’t vote it down- the ones who live outside Miamisburg but work in it. Dayton used that same logic- and you’ve seen the massive move out of the city. Look at the vacancy rates downtown- and compare them to The Greene. Start to see the difference?

Why is Miamisburg in this jam? The answer may be found on page 52 of the 2008 financial report (Note 18):

NOTE 18 – SUBSEQUENT EVENTS:

On January 22, 2009 the City issued $5,610,000 in bond anticipation notes at an interest rate of 2.87%. The proceeds will be used to help fund the City’s share of the Austin Road Interchange project. The notes mature on November 4, 2009. It is anticipated to be repaid with general obligation bonds in the future.

The $5.5 million dollar share of the Austin Road interchange could be the straw that broke the budget’s back. While the city has to pay hard money for its share of the project, the people have to wait for the developers to build the “paradise” that will bring “new jobs” and “economic development” to… well, more than just Miamisburg.

If you were trying to choose where to put your business at the Austin Pike exchange- you could go West and North to Miamisburg and suffer a 2.25% income tax rate- or go East and North and be in Washington Township- where there is no income tax at all. Considering the property tax abatements, and the deals where the property taxes get put back into your development for the next 15 years (long enough for the developer to cash out)- the whole deal ends up only benefiting the developers who build more excess retail, excess office and excess industrial space in the pursuit of the holy grail- “economic development.”

However, if we had UniGov- Regional Government- with only one tax rate, and a lot less elected n00bs in charge, we might even start to look at the big picture- which is, we can’t raise taxes and entice business at the same time.

But that would be common sense now. Sorry Miamisburg, you will pay for the sins of your leaders- who’ve once again helped the developers dig into your wallets. You can’t have police and fire and good schools- without helping make the rich richer and you poor.

Next time they ask you to vote for a tax increase- ask why you can’t just let the county govern you- and save the overhead of a bloated municipal government.

Here is what the Dayton Grassroots Daily Show had to say:

And if you wonder why people are flying planes into IRS buildings– don’t worry- it won’t be long before everyone has had enough of this steal from the poor and give to the rich form of leadership.

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12 Responses

  1. Civil Servants Are People, Too February 19, 2010 / 12:33 am
    It should be no surprise that the biggest tax increases happen in communities that are built-out.
     
    Townships or rural areas still have room to grow, and can increase marginal tax revenue rates simply by allowing that to happen.    We incentivize such growth with robust highway transportation options, like Austin Road, creating ever more opportunities for greenfield development.
     
    Follow the highways, and you will follow the growth in our region.    Sadly, most people accept this as the status quo; instead of making the most of our existing infrastructure, we continue to build more.
     
    The loss of large manufacturers is only part of the story.  Dayton has struggled with this issue for years, and now it is spreading to places like Miamisburg, Kettering, Oakwood, and Moraine.
     
    So the cycle continues….

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  2. J.R.Erwin February 19, 2010 / 6:53 am
    Who are the 5 big land owners around the Austin Road Interchange ?
    Miamisburg is going to build a $30 million Industrial…who is developing that..??? ( like we need another empty industrial site..lol..)
     

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  3. Steve February 19, 2010 / 8:58 am
    I thought all the land around Austin Pike was a “joint development district” by Springboro, Miamisburg, Miami Twp, and Washington Twp.  The taxes are all the same and they are consistently split up between everyone.  Maybe I’m wrong?

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  4. Ryan February 19, 2010 / 1:18 pm
    This is an interesting and timely post. I just got wind of an additional 6.9 mil tax levy that the Kettering School District is placing on May’s ballot. I have a sign being composed that I plan to display on Dorothy Lane that shows a 76% increase in my property taxes since 2002 when I purchased my home (from $1,083 to $1,911). My income has not increased 76% in this time, and I can afford any additional increases. I am not anti-school, but enough is enough. It’s getting too expensive to live in Kettering and/or Montgomery County for that matter. I hope this goes down in flames.

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  5. J.R.Erwin February 19, 2010 / 2:10 pm
    Steve…I might be wrong…I heard Gunlock owns that 400 acres and RG Properties  is building the Interchange and the DDN ~Sisters have 200 acres…(???)..
    The City of Dayton owned 79 acres east of the airport……
    I think David has a list of the $millions$ in over runs for the interchange….

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  6. jstults February 19, 2010 / 6:51 pm
    — the tax will mostly be collected from people who can’t vote it down —

    I think  there’s a catchy phrase to describe that situation.
     
    CSAPT:

    It should be no surprise that the biggest tax increases happen in communities that are built-out.
    We incentivize such growth with robust highway transportation options…
    …instead of making the most of our existing infrastructure, we continue to build more.

    If you want that infrastructure to be used, then lower the tax rate so it becomes a competitive option to building new.  This is not complicated.  Cut services that people don’t really care about in those built-up areas (because they are obviously more than willing to live without them out in the styx) and lower the rates.  It may be hard, but it is simple. It seems like a city should be able to exploit efficiencies and economies of scale so they are at a relatively low rate compared to smaller, sprawled-out burbs.  Why hasn’t this proven to be the case?

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  7. Civil Servants are People, Too February 20, 2010 / 2:11 pm
    @ It seems like a city should be able to exploit efficiencies and economies of scale so they are at a relatively low rate compared to smaller, sprawled-out burbs.  Why hasn’t this proven to be the case?
     

    Costs are lower for cities in some ways.   The cost of trash collection is very low in Dayton because they have their own fleet.   Same for water.    You can save money on those things living in the city.
     
    On the other hand, public safety costs much more because of entrenched unions, using full time staff, and dealing with the true costs of poverty.   These costs are not shared by the affluent communities because our society has allowed the rich to simply move away from the poor.
     
    The fact that Dayton, Kettering, Oakwood, and now Miamisburg will all have essentially the same tax rate is proof enough of that.     The townships are going bankrupt because they are not allowed to collect an income tax.  (Jefferson, Harrison)  Mark my words, it won’t be much longer before Beavercreek has to implement a tax as well.
     
    If Dayton cut their rate from 2.25 to say, 1.5 percent – do you really think there would be a huge influx of people moving it?   I don’t think so.   The key is to continue improving the quality of life and leveraging the resources they have available.
     
     

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  8. jstults February 20, 2010 / 3:15 pm
    CASPT:

    …dealing with the true costs of poverty…

    Good point.

    do you really think there would be a huge influx of people moving it?   I don’t think so.

    You are probably right about people (though I’ve seen plenty of anecdotal evidence based on the comments on DDN of people fleeing Dayton’s income tax), but those sorts of numbers are a significant consideration for a small business looking to grow / relocate.  That’s like being able to give your employees an automatic raise without adversely affecting your competitive position.

    Mark my words, it won’t be much longer before Beavercreek has to implement a tax as well.

    Not if they can keep using other people’s tax dollars to pay for their stuff.

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  9. David Esrati February 20, 2010 / 4:02 pm

    @CSAPT & @jstults that’s why a regional income tax of 1.5% that is distributed per capita- regardless of where you live or work is a better solution. Set aside 20% for true “regional projects or services” like Metroparks – or raise the tax slightly and include social services- and we start ending the infighting.

    We don’t need all these different legal entities with their own rules- and own chiefs. We just need to work together to make the most efficient single government we can. No one outside our region sees any of these podunk mayors or police chiefs as representatives of our region- we’re all judged by Dayton.

    Get used to it.

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  10. jstults February 20, 2010 / 4:41 pm
    David:

    regional income tax of 1.5% that is distributed per capita- regardless of where you live or work is a better solution

    While that sounds like a good idea, I’m pretty sure the folks in Beavercreek would feel the same way about paying for the ‘true cost of poverty’ in Dayton as I do about the stimulus funds paying for their roads.  Maybe impending bankruptcy would be enough of a ‘stick’ to encourage regionalization, but I doubt it.  What are the ‘carrots’ for a burb to throw-in with the city?  Seems like they would view it as a lose rather than a win.

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  11. jstults February 22, 2010 / 2:06 pm
    Folks in Harrisburg, PA understand that raising taxes isn’t the answer:

    At the end of the piece, a Harrisburg government official noted that they can’t really raise taxes, or people will simply move to cheaper suburbs surrounding the city.
    Funny how both municipalities and cities/counties have this problem. Their runaway spending over the past few decades can’t now be fixed by simply raising taxes.
    Truly, the more profligate, poorly managed state and local governments are now suffering the consequences of their mistakes.
    The Municipal Defaults & Bankruptcies Begin

    The point is, how do you know the fairy isn’t a crazy glue sniffer? “Building model airplanes” says the little fairy; well, we’re not buying it.

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  12. Greg Hunter February 22, 2010 / 5:01 pm

    We don’t need all these different legal entities with their own rules- and own chiefs. We just need to work together to make the most efficient single government we can. No one outside our region sees any of these podunk mayors or police chiefs as representatives of our region- we’re all judged by Dayton.
    Get used to it.

    Yes we do, because all these entities are required because the Dayton Region is SO Unique that it requires Kettering, Centerville, Oakwood….. to manage all the Special People in this region.  HAHA…. Yes the US has pulled production forward by 20 years by taking cheap money brought to the US by Greenspan.  These Government pigged out on Public works rewarding their political cronies and gave away too much money in pension plans to public employees.  The public sector is done and all of these Cities and the elected officials are getting out while the getting is good.  I appreciate the comments of the CSAPT and I appreciate the predicament WE as a Country/State/County/City are in, but the data was in evidence years ago and now the time for dealing with it has come.  Unfortunately for US Obama bailed out the current States and Cities but that money is coming to an end and the cutting will begin.  Cities will try to cut where they can but JUST LIKE GM EMPLOYEES – SAY GOOD BYE TO YOUR PENSION!

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