Maumee delays talks on admission tax

4/13/2010

Discussions about a proposed admission tax for certain types of entertainment in the city of Maumee have been put on hold indefinitely while city officials continue to address financial challenges related to declining revenues and increasing costs.

Todd Zimmerman, chairman of council's code committee, told council members last week that he had scheduled a meeting to review the proposed admission fee but canceled it because of ongoing talks about the city's finances.

He said it didn't make sense to consider imposing a tax to cure some of Maumee's financial problems while officials are still looking over numbers and recommendations related to the budget and the city's deficit-reduction plan.

Council president Richard Carr, a code committee member, said rather than rushing into a possible new tax, all issues should be addressed at one time to make sure that city officials are doing the right thing, particularly considering some taxpayers are taking pay cuts in order to keep their jobs and others are less fortunate than that.

In February council approved components of the first phase of the Mayor Timothy Wagener's deficit-reduction plan which included ways to reduce costs and generate additional revenue. Consideration of imposing a 5 percent surcharge, or admission tax, on certain types of entertainment was included in the plan.

Mayor Wagener, who supports the admission tax, has asked council to implement it; council last month sent the matter to its code committee for review.

The mayor's request for approval of the tax was made as the city continues to work toward reducing, and ultimately, eliminating its operating budget deficit.

Mr. Wagener has estimated the admission tax would raise $500,000 per year.

At a 5 percent rate, the Maumee Indoor Theater price per ticket would increase by 7.5 cents or up to 17.5 cents, depending on the day, and the National Amusements prices would increase 30 cents or to 58.75 cents, depending on the day and time, according to information provided to council by Linda Wilker, acting finance director.

As proposed, the admission tax would apply to for-profit entertainment events, but not events sponsored by churches, schools, civic groups, or other nonprofit organizations.

Council last month approved the 2010 operating budget.

The estimated deficit is $2.45 million, not including the Maumee Municipal Court's expenses of $884,285.

The city has money in its Income Tax A, or discretionary, fund to offset the general fund shortfall.

Maumee's deficit is caused in part by drops in revenue, such as from income-tax collections and rises in general-fund expenditures.

The first phase of the deficit-reduction plan could reap savings or bring in additional revenue to the general fund and or the Income Tax A fund of nearly $1.3 million, according to Ms. Wilker.

Council has not yet adopted the full-time personnel part of the deficit- reduction plan which addresses labor costs.

The issue, which had been tabled, was referred last week to council's personnel committee.

Mr. Carr said it isn't right to continue to table the matter because there is no plan to take immediate action; if tabled, it would continue to appear on council's meeting agendas and city employees would continue to come to meetings anticipating a decision.