Wheel tax fails, tax rate increase remains

City looking for ways to plug $99,000 deficit

Leader photo by Tim Ryan Jerry Strickland encourages the Shawano Common Council to cut spending rather than adopt a 60-cent per $1,000 increase in the tax rate at a budget hearing Wednesday at City Hall, 127 S. Sawyer St.

Shawano city officials ditched a proposed wheel tax Wednesday after hearing from an angry contingent of citizens opposed to it, but a spike in the city’s tax rate remained in place at the end of an exhaustive evening of debate.

The city’s share of the tax rate will jump from $9.29 per $1,000 of assessed value to $9.89 per $1,000.

After a lengthy Common Council debate, city officials adopted the proposed increase in the tax levy of 5.8 percent, pushing the levy from $4.7 million to $5 million.

The vote was 4-2, with council members Bob Kurkiewicz and Lisa Hoffman voting no.

Hoffman conceded during the council discussion that there wasn’t any realistic place to cut the city’s general operating budget, but was bowing to the demands of residents who attended the meeting.

“We run with lean staff and our departments run lean as well,” she said. “I think people need to be aware of that.”

Hoffman said the public reacted negatively in the past when services like curb-side garbage pickup were recommended for the chopping block.

“I don’t think the vast majority are willing to give up those basic services that the city offers,” she said. “That’s why I ask my constituents, ‘What do you want to give up?’”

Hoffman said city staff was already stretched thin, and she had reservations about cuts to the city’s investment in its infrastructure.

However, Hoffman said, passing the levy as proposed would not address the concerns of constituents who attended the meeting.

“They were mad about the wheel tax and they’re mad about the 60 cents on the levy,” she said.

Hoffman also voted against the wheel tax after voicing her support for it.

“I personally see the wheel tax as an appropriate tax because by law it has to be spent on what you collected it for. Many of our taxes are not like that,” but, she told attendees, “I will show you that I listened to you and my vote will reflect that.”

Sandy Steinke and Seth Mailahn were the only two council members who voted in favor of the wheel tax, which would have added an additional $10 fee for vehicles registered in the city.

Steinke called it an appropriate tool for helping fund street projects that would reduce the city’s reliance on borrowing.

Kurkiewicz called it “a regressive tax that hurts the people that can least afford it,” and council member John Hoeffs expressed concern that the fee could go up in future years.

The defeat of the vehicle registration fee means the city will have to either cut back on its capital improvement projects next year or find other places to cut to make up for the loss of what was expected to be about $99,000 in revenue.

Department heads have been tasked with bringing forward suggestions for those cuts, which will likely be focused on capital improvement projects such as street reconstruction.

City Administrator Brian Knapp said those cuts wouldn’t be found in the general operating budget, unless the council was willing to cut staff.

“That’s the only reasonable option you have as far as cutting general fund costs,” he said.

A drop in the city’s equalized value accounts for roughly 15 cents of the 60-cent increase, according to the city. Capital improvement debt adds another 17 cents. The biggest increase, of 27 cents per $1,000, is the result of a parks referendum that was overwhelmingly supported by the public earlier this year.

The council debated possible budget cuts for more than two hours without reaching agreement before punting the issue to department heads.

The council seemed determined to prove the transparency of local government to those in attendance by rehashing discussions previously held at finance committee meetings, then taking the time and trouble to explain that they really had discussed all of these things before.

On several occasions, council members plainly stated they were having the discussion to prove how transparent they are, even though a number of the roughly 50 people who attended had filtered out by then.

The council discussion followed comments from nearly a dozen residents who chastised city officials for the proposed wheel tax, the tax rate increase and a perceived lack of transparency.

Jerry Strickland suggested the city could easily cut its budget by 5 percent and said the tax increase was limiting potential growth in the community.

Tony Zielinski echoed those concerns.

“Any kind of tax increase will be a reduction of value in the city,” he said, and he advised the council to seek a zero increase budget.

“People are disgusted,” said Paul Romberg, who accused the council of railroading through a budget without sufficient public input.

Deb Noffke advised the council to get its debt under control and spend less money.

“People are hurting in this town,” she said. “We’ve got to spend less. It can be done, and your taxpayers deserve it.”

Terry Hilgenberg targeted the city administrator in his budget comments, referring to it as the “Knapp budget” and calling it “a ponzi scheme.”

He said the disregard of taxpayers and citizens of Shawano was “grounds for dismissal,” and he encouraged council members to put taxpayers first.

“You’re not here to represent Mr. Knapp and the employees of the city,” he said.

Despite the city’s 60-cent increase, the overall tax rate will actually decrease by about 10 cents per $1,000, thanks to a decrease in the tax rates of other taxing entities. That means the owner of a $100,000 home would pay about $10 less in taxes.

City officials had expected a 5 cent increase in the overall tax rate, but that was before learning that the state’s share was dropping to zero next year.

The Shawano School District’s assessed tax rate for city property owners will drop by about 45 cents per $1,000 to about $9.65, while county’s assessed rate will ease by 9 cents to about $5.16 per $1,000.