Wyoming income tax plan would hurt competitiveness, business community says


WYOMING, MI — A proposal in the May 3 ballot in Wyoming to levy an income tax in the city but cut property taxes has caught the attention of some area businesses.

The proposed income tax comes at a bad time as businesses try to recover from the coronavirus pandemic, inflation continues to rise and labor shortages plague a number of industries, according to seven local businesses.

“As an employer and with genuine concern for our employees and their situation, we believe now is not the right time due to the challenges everyone is facing with inflation and, again, the broader financial insecurities as the recovery continues to move forward,” Mark Schurman, spokesman for Wyoming-based Gordon Food Service, told MLive/The Grand Rapids Press this week.

The Grand Rapids Area Chamber of Commerce and seven Wyoming businesses, including Gordon Food Service, have co-signed a letter opposing the creation of income tax in Wyoming.

The May 3 ballot proposals would cut property taxes by about half, but levy an income tax of up to 1% on corporations and residents and up to 0.5% on those who work in the city but live outside of it.

If approved, Wyoming would be the third city in Kent County to have an income tax. The others are Grand Rapids and Walker.

The propositions are two separate ballot questions. Both must be approved by voters to go into effect.

The Wyoming City Council, in a 4-3 split vote in September 2021, approved placement of the proposals on the ballot. Trade officials released their letter of objection in September.

Schurman said the additional taxes employees would face under the proposal would affect Gordon Food Service’s ability to attract and retain talent.

Floriza Genautis, CEO of staffing and recruiting agency Management Business Solutions, told MLive it would have a similar negative effect on her business. While an income tax may not be a deal breaker for some employees, Genautis said it would reduce the competitiveness of Wyoming businesses and add to ongoing employee shortage issues.

Genautis said some current and potential employees may also lobby for higher pay to offset income tax.

Related: Wyoming voters will decide to cut property taxes and pass income tax

City of Wyoming staff said it would likely only levy a 0.8% income tax on residents and 0.4% on nonresidents.

City staff say the move will generate $6 million in additional revenue per year and allow the city to hire 27 additional firefighters and 13 police officers and invest more in parks.

The alternative, they say, is to raise property taxes.

Deputy City Manager John McCarter said there was an urgent need for additional funding in the city, with the fire department understaffed to the point of closing two stations and relying ‘constantly’ to nearby towns to answer calls.

“We don’t have enough firefighters on any one shift to safely respond to a structure fire, which means residents and community members have to wait for nearby departments to respond to get help. help,” McCarter said.

The additional officers would allow the department to conduct proactive actions, such as neighborhood patrols, traffic enforcement and relationship building in the community, McCarter said. The dollars would also fund critical investments in the parks.

The main concern highlighted by companies sending the letter to the board was the ‘troubling timing’ of the ballot issue, citing the ongoing pandemic recovery, staffing shortages, other funds available and the date of the election. itself, not the use of the funds.

As in the letter she co-signed, Genautis said she wants city leaders to put the income tax issue on the ballot in either the August or November primary elections. this year, when turnout would be much higher than in May and more residents weigh in. .

McCarter said the May election was chosen for several reasons, including that it would give the city more time to communicate with residents and businesses about tax changes before they potentially go into effect. for the 2023 taxation year which begins on January 1, 2023.

Genautis, Schurman and others who signed the objection letter said the city has other state and federal funds it can use for some of the needs it has identified. Those funds include $13.1 million in federal stimulus dollars Wyoming received last year.

“In addition to timing concerns in general, we also believe there appear to be other funding sources that have not been fully explored or exhausted,” Schurman said.

McCarter said it would be irresponsible for the city to hire 41 additional staff using federal stimulus dollars, which are one-time funds.

For someone earning $60,000 a year and living in Wyoming, the proposed income tax translates to about $464 a year. For someone who lives out of town and earns the same amount, income tax translates to about $232 per year.

The proposed property tax decrease would reduce and cap the tax to a maximum of 7.545 mills effective July 1, and then limit it to a maximum of 5 mills effective January 1, 2023.

Currently, the city levies a property tax of 11.8 thousandths. For a house with a market value of $200,000 and a taxable value of $100,000, the current mileage equates to approximately $1,180 in taxes each year.

At the proposed mileage limit of 5 mills, that same owner would pay approximately $500 in taxes each year.

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