Featured Editorial

Toledo must start now to repair and rebuild its decrepit streets, as a matter of both public safety and economic renewal. Issue 2 on the March 15 city ballot is the only available option that would raise the money needed to address this task. On that basis — and with reservations — The Blade recommends a YES vote on the proposal.

Voter approval of Issue 2 would increase, through 2020, the temporary portion of Toledo’s income tax from 0.75 to 1 percent, creating a total municipal income tax rate of 2.5 percent. About 20 other Ohio cities, including Columbus, already levy such a rate.

The higher tax would begin July 1. When it takes full effect, the tax increase would raise a projected $16.6 million a year for road repair; Mayor Paula Hicks-Hudson’s current budget proposal for the next fiscal year allocates no money to fix residential streets. If voters approve the tax hike, the mayor says repairs will begin this summer.

The remaining $2 million a year from the tax boost would go to the city’s general fund for operating expenses. This year, the increase would enable the city to accelerate the start of the next police class, ensuring the police department will have enough officers to replace those who are expected to retire in 2016.

The Hicks-Hudson administration calculates that the tax increase would cost the typical Toledo household earning $35,000 annually about $87.50 a year. That is not an inconsiderable sum of money to hard-pressed Toledoans.

But compare it to the cost of new tires, or a front-end alignment, or replaced tie rods, or any other vehicle repair forced by driving on lousy roads. In Toledo, such work routinely costs $200 to $250, and often considerably more. That isn’t the kind of business growth Toledoans need.

Moreover, bad roads are a threat to public safety; motorists who must take evasive maneuvers to dodge giant potholes can create other traffic hazards. Dilapidated streets are also a detriment to business activity and tourism.

“We cannot wait,” the mayor told The Blade’s editorial page. “We’re respectful of the condition of the taxpayers. That’s why we’re holding the line in our budget — there’s no new spending. But we also have to be able to deliver good basic services and fix our structural deficit.”

Because Issue 2 would raise the income tax, seniors who are retired from the work force would not be affected. And while the pro-tax campaign understandably does not stress this reality, the increase also would be borne by suburban residents who work in the city. These factors make the income tax a preferable mechanism to other sources of revenue to fix roads, such as higher property taxes or broad-based special assessments.

Opponents of Issue 2 insist that the city would have all the money it needs for road repair, and all other essential services, if it would just eliminate its wasteful spending. Such assertions tend to be based more on anecdotal accounts and rhetorical fervor than hard facts.

Some numbers: Income tax revenue pays for two-thirds of the city’s operating budget. The income tax, a portion of which also goes to the capital budget, is expected to raise $167.5 million this year. Income tax collections have rebounded since the Great Recession, but remain below what they were in 2007, even before taking inflation into account.

By contrast, state government has cut its aid to Toledo — often a matter of returning tax dollars Toledoans send to Columbus — by more than $83 million since 2008. Toledoans have benefited less than richer Ohioans from the state tax cuts these spending reductions helped pay for.

Two-thirds of Toledo’s general-fund budget goes to personnel costs. Seven out of eight jobs funded by the budget are in public safety — police and fire protection and courts. Few Toledoans would suggest that the city should have fewer police officers and firefighters, or that their pay should be cut.

Adoption of Issue 2 would enable the city to end the pernicious practice of shifting money from its capital budget to its general fund to meet daily expenses, notably paying police and fire salaries. Voters approved that transfer during a budget emergency in 2010; even after Toledo’s ostensible recovery from the recession, city officials have not ended the policy, skimping on spending for road repair and other capital improvements.

A column on the next page cites a new study that ranks Toledo fourth among the nation’s 100 largest cities in its degree of economic distress. The study’s authors say the city needs to attract private investment to improve its economy, but such investment is not likely to come to a community that cannot provide even marginally decent roads.

Issue 2 could be better. We have said — and Mayor Hicks-Hudson agrees — that the city should have amended its municipal code to ensure that all proceeds from the tax increase would have gone to road repair. But nearly 90 percent isn’t bad.

If voters approve the ballot proposal, Mayor Hicks-Hudson pledges to appoint a citizens’ oversight panel to review city spending. Separately, an initiative proposed by Toledo City Council member Sandy Spang and funded by the Toledo Regional Chamber of Commerce would bring to the city a process called priority-based budgeting, which promises to lend greater rationality to decisions about taxing and spending. Whatever the outcome on Issue 2, both initiatives need to proceed.

But in the meantime, the city still needs to fix its roads. Issue 2 isn’t ideal, but it’s the best plan available to Toledoans right now. Vote YES.