|Monroe City Council has placed an issue on the November ballot, which would increase our current 1% income tax to 1.5%. As a result of our dramatic residential and commercial growth, the City is struggling to keep up with the continued demand on services. We know the future growth will require new revenue to maintain adequate safety service staffing levels and provide for necessary capital improvement projects.
Like so many of our neighboring communities, City Council has explored all of its funding options and has concluded that a .5% increase to the existing 1% income tax is the most prudent method to provide for short and long term operational and capital expenses. City Council has considered this option for many years, realizing that our high growth will require more revenue. At this point in the City’s history, we know we cannot continue to meet the demand on services without new revenue.
Why is the New Revenue Needed?
This new revenue is needed to support the operational and capital improvement projects required to maintain the level of services currently provided. Without this revenue, we anticipate most capital improvement projects and needed additions to Police and Fire/EMS staffing levels required by federal standards will have to be funded by property tax levies. The operational and capital improvements are required to keep desired levels of service, including street repair and resurfacing, safety service vehicle replacement, park and recreational projects, etc.
How Are City Services Paid For?
Fortunately, in Monroe, residents pay for only a fraction of the City services they receive. The difference is made up through other revenue sources such as commercial and industrial property taxes, income tax with holdings from non-residents, permit fees, etc. Chart “A” below shows the main sources of the City’s General Fund revenue.
The City receives only 12% of your total property tax bill. Chart “B” shows how your property taxes are distributed among the various governmental entities.
Over the past six months, the City has thoroughly reviewed its operations. As a result, the City has cut or created savings of over 2.3 million dollars in the 2003 and 2004 budgets. Budget cuts were made in both operational expenses and capital improvements to ensure the most efficient operations while attempting to maintain our current level of services.
The portion of the General Fund allocated for Police and Fire/EMS operations is disproportionate to the other areas. One reason to enact this increase is to reduce the reliance of the Police and Fire departments upon the General Fund. The net result is that the General Fund would have more resources available for future capital improvement projects.
How Much Revenue is Generated by the Increase?
The proposed increase will generate approximately $680,000 annually in new general fund revenue. The ballot language also contains a provision to reinstate the full tax credit (full reciprocity). Lastly, if passed, one-third of the total annual income tax revenue collected will be dedicated exclusively to funding Police and Fire services. By dedicating a full one-third of all future income tax collections to Police and Fire, we hope to avoid requesting future Safety Service property tax levies.
Who Would be Affected by the Increase?
Because our income tax is applied to individuals working in Monroe, the proposed .5% increase would affect less than one-third of all working residents of Monroe. Those one-third affected are the citizens who both live and work in Monroe. Therefore, two-thirds of all working Monroe residents pay no local income tax and are unaffected by any increase.
Monroe residents who are retired are also unaffected by any income tax increase. The majority of the increased tax burden would be assumed by those individuals who work in Monroe but live in another community.
By following our growth plan of dedicating 60% of our total land area for industrial and commercial uses, the income tax revenue will grow incrementally and reduce reliance on future property tax levies to fund services. The Monroe Business Council has carefully reviewed the funding alternatives and has endorsed the proposed .5% increase.
City Council asks for your vote to help us maintain the level of services residents and businesses have come to expect. We welcome any and all input from you at any of our regularly scheduled Council meetings or via mail and email.