|
|
The Suburbanite
  • Jim Hillibish: Suddenly, a rainbow and a pot of gold for Canton

  • Remember the debate in City Council last summer over seeking an increase in the Canton payroll tax or converting the tax to yet another property tax? The threat: a looming $4 million deficit, souvenir of the recession, would eat us alive.

    • email print
  • Remember the debate in City Council last summer over seeking an increase in the Canton payroll tax or converting the tax to yet another property tax? The threat: a looming $4 million deficit, souvenir of the recession, would eat us alive.
    The hand-wringing was epic and included the usual threats to lay off police and firefighters. Why, incidentally, are they always the first to go, before the mayors’ assistants?
    What really happened?
    As any sophomore taking Econ 101 could tell you, government finances are directly related to the economic health of its citizens. This past summer, we were in recovery mode, employment was increasing, city tax receipts were climbing. And a lot of us were wondering, why the rush? It will get better.
    All this was ignored by our officials who are responsible for forecasting such conditions.
    Apparently, someone did think to check the city income-tax receipts. They are our No. 1 economic statistic. You don’t need Timken to tell you it is laying off or hiring. It instantly is apparent in the income-tax collections.
    STATUS QUO
    Then on Thursday came a crucial confirmation that the city finances are indeed in good shape. Moody’s Investors Service agreed to continue an A1 rating on the city’s $18.9 million general obligation debt.
    This tells bond buyers they have no fear investing in Canton’s municipal paper, backed by solid tax collections. The city’s bonds will continue at a low interest rate, saving us even more.
    Moody’s solidly backed the rating, signaling “improved income-tax receipts” as a primary reason.
    What would have happened if council and then our generous voters had passed the tax increase? It would be fat times in every city department.
    JOBS EQUAL REVENUE
    We need better than this, perhaps starting with someone who understands the economics of our system.
    It’s not complicated. Feed the people and government will get its piece of the action. Each tick downward in the city’s unemployment rate means more cash in its coffers.
    The same thing happened with our county, which is dependent on the sales tax. Recovery sends that tax soaring, too, and the county quickly wound up with a pile of unexpected revenue.
    None of this is voodoo or even a surprise. It does take a calculator for the advance work, and the will to be transparent with the public. Tax increases, unlike knee-jerk reactions, are serious business.