Lordstown is rushing toward a doubling of its income tax

Facing a 25 percent decrease in revenue, the village of Lordstown is reacting by doubling its income tax rate. Does that strike anyone else as a bit extreme?
This week, village council moved to second reading an ordinance that would increase the income tax from 0.5 percent to 1 percent. The finance committee made its recommendation only a week ago, and the legislation is on track to be passed June 19. Does that strike anyone else as a bit of a rush to judgment?
Taxing its residents -- and in the case of Lordstown, taxing thousands of people who aren't its residents -- is one of the most intrusive things a government can do. It should be done with due deliberation and as a last resort.
The argument for increasing the tax is simple enough. The village is facing a decrease in revenue because the third shift is being cut at the General Motors plant and because satellite suppliers of products for the plant are trimming their work forces. Rather than first look for ways to reduce expenses, council has turned toward a tax increase.
And rather than lay out exactly how much the village needs to operate, how much it stands to lose and how much will be needed to fill the gap, council appears to have quickly determined that what is needed is a doubling of the tax rate.
The easy way
It is easy to get addicted to the fast money of an income tax, especially when many of the taxpayers are nonvoters who come to town only to work. A couple of years ago, there was talk in Lordstown of a combined village and school income tax that would have allowed the local school district to tap those out-of-town dollars. If that ill-advised proposal had gone through, what income tax rate would village officials be talking about enacting today? Two percent?
It has been suggested that the rush to enact the tax increase may be tied to council's desire to capture a bigger share of the large lump-sum payments that will go to workers who take a General Motors buyout. The buyouts are being offered by a company that is desperate to reinvent itself and to avoid bankruptcy. The village has received income tax payments from those employees for decades. To make a mad grab for a bigger piece of the buyout money is greedy.
Interesting arguments
It is interesting to listen to some of the arguments made by council members in support of a tax increase.
They say that the village provides services for the plant with almost no payment of property taxes because of tax abatements designed to keep the plant open. Hasn't the income tax collected from thousands of workers at the plant for a generation more than made up for lost property taxes?
They say that Lordstown needs millions of dollars of sewer lines in order to attract other industries and to spare nearly half of the village's residents the expense of replacing their septic systems. Why should workers at the plant bear the cost of installing sewer lines for residents of the village? A dozen Trumbull County townships need sewer lines, but none has the ability to tax the income of outsiders to pay for them.
The village has incurred costs directly related to General Motors, such as the purchase of a $680,000 ladder truck it didn't need except to reach the roofs at the plant. But won't millions of dollars in income tax revenue more than cover the extraordinary cost of a fire truck that will be in service for 25 years?
Vicious cycle
Village officials are operating within a circle of entitlement, where because the plant has made certain demands of the village, the village demands that the plant not only carry its own weight, but virtually the entire weight of the community.
Jim Graham, president of United Auto Workers Local 1112 and an early opponent of the tax increase, points out that Lordstown's per capita expenditures well-exceed those of other small towns. Interestingly, he noted that Lordstown spends at three times the rate of nearby McDonald. That's a company town that was once able to provide its residents exceptional services, paid for largely by the property taxes of U.S. Steel Corp. Village officials there had to learn how to scale back the hard way, but they did -- in the late 1970s, just about the time Lordstown got its first jolt of income tax money.