Wyoming looks at city income tax

WYOMING, Mich. (NEWSCHANNEL 3) - Many people are dealing with shrinking budgets, and the State of Michigan's is shrinking more than most.

The financial squeeze has led to big-time budget cuts for the upcoming fiscal year that will start October 1^st, those cuts add up to $670 million.

Among other things, $164 million in school aid will be cut off, and $28 million in wage concessions will come from state employees, including laying off 1,500 workers.

The budget concerns trickle down to each individual county and city, forcing many to look for new ways to raise revenue. That includes 22 Michigan cities that charge city income taxes. In West Michigan, that includes Albion, Battle Creek, Big Rapids, Ionia, Muskegon, Muskegon Heights, Walker and Grand Rapids.

Now, Wyoming may be joining that list.

In the current economic climate, the words 'new income tax' might scare just about anything away, but city leaders in Wyoming are taking a look at adding an income tax on people who live in the city.

Many people in the town are wondering whether the idea is realistic or even has the slightest chance of passing.

Considering what's been happening as of late, Harry Van Lonkhuyzen literally lives on easy street, but the process he's been going through is anything but easy.

"I've got it right now where I'm fighting them, when I put five houses up to my house, and mine's overtaxed probaby about $28,000, which is quite a bundle," said Van Lonkhuyzen.

Van Lonkhuyzen is challenging the property tax assessment on his house, he's one of many all over the state who believe that the city is over-taxing property owners on homes that have declined in value.

"It's scary," said Van Lonkhuyzen, "all they talk about is more money, more money."

If Van Lonkhuyzen wins his appeal, the City of Wyoming loses. And Wyoming, like so many other communities in the state is facing major budget problems, partially because of declining property tax revenues. In the case of Wyoming, the loss of the General Motors stamping plant delivered a million dollar hit to their budget. It's enough of an issue to stir the talk of a new income tax.

"We need to start thinking about what the options might be, and again is it a revenue option or an expenditure option," said Wyoming City Manager Curtis Holt.

Holt says he's had initial discussions with city council members. The city has enough reserves to get through the next two to three years, but after that they have only two choices, either lower expenses or raise revenues. To add to the problem, most of the budget is in personnel costs, and many of those folks are in public safety.

Van Lonkhuysen says no way to an income tax, and says he wants city hall to know how he feels about property taxes as well.

If Wyoming wants to institute an income tax, voters would have to approve of it, and that would very likely be a tough political sell for most people.