As part of several options being explored, the Wyoming City Council has received an income tax feasibility report prepared by Great Lakes Economic Consulting LLC as it faces a critical juncture to secure sustainable revenues moving forward.
A study examining the feasibility of a personal income tax noted that the City could raise $23 million annually in revenue from Wyoming businesses, residents and non-residents working in the City. If implemented, which would require voter approval, the income tax would be paired with a reduction in property tax for Wyoming homeowners to offset the increase.
The study, which was introduced during Monday’s City Commission meeting, projected revenue based on salaries, benefits and other factors. The study included a five-year projection of potential income tax revenues and estimates of cost to the City after a reduction in property tax rates.
“Throughout the last decade, we have explored and implemented many initiatives to secure a sustainable revenue base while reducing City expenses,” said City Manager Curtis Holt. “The Headlee Amendment and Proposal A have severely limited our ability to raise revenues and, in combination with reduced cost-sharing from the state and declining property values, have led to serious budget constraints.”
While only one of the options being evaluated and explored, the income tax feasibility report provided detailed information relating to collection estimates. The projected total collections from the Wyoming income tax rate equate to roughly $23 million annually, raised from three different groups including residents, non-residents and corporations.
Specifically, $10.9 million would come from the resident income tax, $9.8 million would from the non-resident income tax and $2.3 million from the corporate income tax.
Although Wyoming residents who earn an income would be responsible for paying an income tax, if implemented, property taxes would decrease significantly with a 7.1405 mill reduction.
“At this point, we are exploring several different opportunities and looking at all of our options,” Holt said. “The income tax option is only one avenue being explored to provide sustainable funding for our City. We have our residents top-of-mind, and will continue to as we search for the best long-term solution to this critical situation.”
Holt said the income tax is one example of revenue enhancement that the City is now considering. Others include additional millage requests, further reducing employees, raising water and sewer rates, and creating an authority to oversee water and sewer treatment operations.
In the past, Wyoming established and then renewed a public safety millage with overwhelming community support. Its general operations millage was also increased to its limit under Headlee.
Over the past decade, the City of Wyoming has implemented a number of expense reductions and cost-saving measures, including:
- Moved public safety dispatch operations to Kent County
- Closed City Hall on Fridays and shifted most employees to a four-day work week
- Made significant contract changes, including changes to health insurance
- Closed the defined-benefit pension and health plans, shifting to defined contributions
- Reduced personnel
- Retired bonds early