After much discussion and further amendments, members of Shelby City Council passed Amended Ordinance 12-2014 on Monday evening, declaring the necessity for 0.2 percent income tax levy for three years for the purpose of maintaining safety forces. The tax levy will be presented on the ballot to Shelby voters in the fall.
The ordinance was first introduced by Councilwoman Pat Carlisle on May 5. A 0.2 percent income tax would produce approximately $435,000 annually that would be expended specifically for Police and Fire Department line items from the General Fund. At present, the Police and Fire Departments represent 75 percent of the total General Fund budget.
“I see it as another option for trying to do something in the General Fund,” said Carlisle on May 5.
During council’s meeting on Monday, Carlisle expressed concern with the amended ordinance presented, noting it had been amended during the May 19 council meeting to exclude language that would omit the tax from the city’s credit provisions. Section Six of the original ordinance stated, “If the additional two-tenths percent income tax is approved by the electors of the city of Shelby, then and in that event, said two-tenths percent additional tax shall not be subject to the credit provisions as contained with Section 880.10 of the Codified Ordinances of the City of Shelby.”
“To make that change virtually cut in half what the approximate annual receipts would be as a result of this, if the voters approved it,” said Carlisle.
Carlisle explained instead of the $435,000 produced annually should the 0.2 percent income tax be accepted in the original ordinance, the tax would instead generate approximately $217,000 annually. A motion from Councilman Harold Shasky was accepted to amend Ordinance 12-2014 yet again to include the previous Section Six. Councilmen Garland Gates and Nathan Martin voted against Shasky’s motion.
“The question I have is, what number that we’re trying to raise is enough? It was my understanding that an additional annual bump of $217,000 would get us over this hump in the short term,” said Martin. “Going forward, a $435,000 bump wasn’t necessary. Is that inaccurate now? Are we needing the full force of $435,000?”
Finance Director Bob Lafferty explained the funds will help push the General Fund into a positive balance as opposed to breaking even.
“I think it’s really important to realize we don’t want to paint ourselves into a corner here,” said Carlisle. “The voters get to dial in on this, and that’s where it lies. If the voters vote for it, then we’ve got a substantial amount here that we can sustain ourselves for a period of time. If they don’t vote for it, we’ll have to go toward alternative methods, some of which will be extremely painful. But that’s where it’s at, it allows the voters to be participants in the issue of sustaining our general fund.”
Councilman Steve Schag voiced his support of the ordinance, noting the levy would work in the same fashion as the levy that built the Shelby Justice Center.
“Citywide, everyone picked up part of the weight,” said Schag. “I believe we have to educate voters once again, appeal to them. I think that is a favorable formula.”
The third reading of the ordinance was passed with Councilmen Gates and Martin voting no, and the ordinance eventually passed with only Councilman Martin voting no. But with the passage of the ordinance, Gates pointed out the process has only just begun.
“I want to look long term,” said Gates. “Voters in Shelby are going to have four tax levies to consider. You can’t just throw something on the ballot and expect the people to automatically vote. This is only part one; part two is putting together a levy campaign.”
