Poorest will pay the most

It takes a lot of money to be poor. That’s how the saying goes. When your income isn’t more than a certain level, you don’t qualify for low-interest loans. Credit cards charge higher interest and car payments and insurance cost more when your income isn’t high. It can be a vicious cycle that limits single parents, people with health issues, handicapped veterans, the elderly and, increasingly, young people who struggle to find good jobs. It is a cycle that doesn’t care if you are well educated, as witnessed when college graduates have difficulty locating work even while being responsible for college loans.
In Homer, that is certainly the case when it comes to both city services and city sales tax. You will pay more for being poor. The truth is, the poor pay more sales tax. Every rental costing $500 or more a month is charged a flat $37.50 tax. Over the course of a year, that is $450 each renter has paid to the city and borough. The owner of the property also pays property taxes on the same building – double taxation.
When you add in the new water-sewer fees for non-metered rentals, tack on another $540 a year per rental – and this doesn’t take into account the water they use and pay for additionally. It also doesn’t count the sales tax on a water bill. One costing, say, $80 will be pay $7 in sales tax.
The Homer city council thoughtfully debates these matters. In lengthy discussions they look at all the water-sewer users on the system. They look at the amount of money collected each year, and notice the gap between users and the money it takes to operate Homer’s expensive, highly upgraded system. They listen as the city administration proposes a plan. The council listens as nearly every person who appears before them to testify says these new water fees cause undue hardship on an economic group who can least afford it. The tally on the number of people who testify in favor, and those against it, is recorded. In the case of the water-sewer fees, every person testified the new fees were unequal and would hurt their finances.
Still, what did the council do in its wisdom?
Three of them voted down ideas for fixing the problem. Enough to tip the issue.
This is difficult to justify.
The city administration is the entity who devised the new fees. But the decision to institute the new fees before studying the repercussions rests on the city council. Through the public testimony process, they are the policy makers who need to gather information before action.
Kudos to Mayor Hornaday to put forth the idea of a task force. However, a task force approved by the council to study the solution was given more than a year to complete its work. The rationale was that setting rates for a utility is such a complicated work, that they need time to look at it from all angles. Really? If setting rates were so complicated, then why was the council so quick to make adjustments that now mean the town’s poorer citizens pay higher water-sewer costs?
Another point to consider is the possibility of declining low-income housing. Many landlords offer rentals that are all-inclusive – meaning the utilities are included in the rent. Now, however, landlords must pass the $45 charge along to each renter. This charge, coupled with borough sales tax, can price the dwelling far above what a low-income renter can afford. Remember, these low-income renters are the people that make this city work. They are the food server, grocery clerk, gas station attendant and many others who work hard to put food on their table.
To be sure, the council works hard and doesn’t make decisions lightly. But, let’s hope the task force can do a better job.

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Posted by on Apr 4th, 2012 and filed under Editorial. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

1 Response for “Poorest will pay the most”

  1. DLong says:

    Well Said… thank you for the thoughtful words. You are so right. and now the task force will take 16 months to talk about it and meanwhile people will suffer. And you are so right it is the people who can least afford th pay that bear this cost from the city councils lack of studying the issues and the ramifications before they made such a harmful decision.

    and always remember this…. the city council memebers who vote for everyone to pay these outlandish water bills dont all pay a water bill. Beth and Walt dont. But they work where water is. They use the water system. Why dont they pay a surcharge? How about 5 bucks a month for every home in city limits. that way the city can pay their bills remodel the tajmahal city building and enjoy that 100 grand worth of new furniture they are sitting on while they make their royal decisions…. let them eat cake right Beth?

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