How various cuts could impact Marion taxes
If the City of Marion were to decide — or be forced — to live within its revenue neutral tax rate, what should it cut from its budget?
Final budget requests have not been made public, nor have they been distributed to city council members for discussion.
With only one regularly scheduled council meeting remaining before the deadline for the city to adopt a specific budget proposal, some examination of alternatives — tentative and unofficial though they may be — could be in order.
Property taxes account for only a fraction of the city’s revenue. Sales taxes, other state tax distributions, and profits from sales of electric service provide more money.
As a result, a mill of property taxes is worth only $11,894, meaning massive cuts might not be needed to eliminate 8.901 mills of spending.
Here, to put potential cuts in perspective and provide ideas for discussion, are examples of cuts found by looking at various items picked out of past data and preliminary budgeting data distributed by the city’s budgeting consultant, accountant Scot Loyd.
Any combination totaling 8.901 mills would allow the city to live with its revenue neutral tax rate:
Economic development vacancy, 7.156 mills — The city hasn’t employed an economic development director for more than a year and a half, but the position still is in preliminary budget projections. Not only has the city done without a director. Lack of success in recruiting major employers has prompted some other cities to eliminate similar positions.
Community enrichment, 6.606 mills — Margo Yates plans to retire in May. Many have termed her irreplaceable as the city’s “Walmart greeter.” Her city “department” was cobbled together out of various duties that could be reassigned back to where they originally were at little or no cost rather than attempting to replace her.
Police vacancy, 5.958 mills — For more than six months, the city operated without its three highest-paid police officers, which should have created a considerable surplus in this year’s budget. Since then, the city has hired a new chief but has not yet filled two other vacancies. Not filling just one of these would, on the basis of 2022 cost, save almost 6 mills. Additional savings would be possible by avoiding such things as a recent $9,000 remodeling of the police station and a proposed purchase of a $35,000 squad car, which might not be needed if fewer officers were employed. These two additional changes would add 3.699 mills to the projected savings.
Golden parachutes, 4.204 mills — Although not budgeted, this is the amount in salary the city was obliged to pay Mark Skiles after firing him as city administrator two days before Christmas. Presumably, this cost is what ate up savings from other unfilled positions. The city many need some sort of contingency fund to handle unexpected costs. Creating such a line item rather than inflating other line items or preserving items it knows it is unlikely to use might be a way to make budgeting more transparent and responsible.
Another pickup, 3.783 mills — The city already has more trucks that it has employees who drive trucks on the job. While it might be prudent to regularly replace older trucks, going a year without replacing one might be more palatable than making cuts elsewhere. It goes without saying that other costly equipment purchases such as a street sweeper (23.962 mills if the cost is paid in a single year) would need to be avoided or scaled back.
Streets to vacant lots in the industrial park, 3.573 mills — This is how much, not including interest, would have been needed annually for 20 years to pay off bonds that voters rejected in December. The expense — all 20 years’ worth, in one clump — still appears in some preliminary budget data for 2024. Loan repayment would have been made from sales tax receipts, but those receipts legally could have been used for other expenditures, making this amount available for other purposes each year if the streets aren’t built until they are needed.
Health insurance, 2.810 mills — Given the rising cost of insurance, this level of savings, projected from 2022 data if employees were required to pay for 20% of their insurance coverage (a common practice among some private employers), might actually be significantly understated. The city also could limit insurance to employees only; family coverage would be entirely at the employee’s expense.
Part of across-the-board raise, 1.808 mills — Instead of a 5% raise to all city employees, a smaller raise of 3% would save this much money, based on 2022 salary data.
Cell phones for everyone, 1.613 mills — The city pays for more cell phones than it has employees. It might not be feasible to eliminate all of them, but at least part of this total could be saved by switching to giving employees a $20 credit for using their own phones and using old 400 mHz police and fire radios instead of phones to reach city crews in the field.
Employee utility discounts, 0.494 mills — The discounts, the maximum allowed before the city must count them as income and deduct taxes from them, were designed to reduce turnover, but turnover has accelerated since their creation. This number is based on 2022 data.
Street replacement, 14.293 mills — Given public sentiment, this probably won’t be one of the items chosen, but listing the amount if mills needed for planned projects, if undertaken without borrowing, gives an indication what might need to be cut elsewhere to provide even more of this type of work.
Even after a budget is adopted, the public will be invited to a hearing Sept. 5 where suggestions for changes will be solicited, as required by state law.