Benton Harbor City Commissioners have voted to make an emergency transfer of $450,000 from the city income tax fund to the general fund to pay bills.
At Monday’s regular meeting, commissioners were told the city can’t meet its financial obligations due to a variety of factors that include legal bills, insurance costs, and the ongoing shortfall in the utilities fund. That was created when residents stopped paying their water bills during the lead crisis.
Commissioner Emma Kinnard balked at using income tax dollars for regular bills, but Mayor Marcus Muhammad said the ordinance creating the income tax does allow for that. The tax was approved by voters in 2017 to pay for street and alley repairs, but Muhammad said it can also be used for emergencies. He said many cities with an income tax just put that money in the general fund.
“But when we set it up — our infrastructure — and it was a public vote and it was by referendum, and we have been faithful to what we presented to the residents, where the money will only be used for streets, sidewalks, alleys, and emergencies,” Muhammad said.
Muhammed noted this is the first time commissioners have ever voted to use income tax dollars for anything other than infrastructure since the tax was first collected in 2018.
Commissioner Edward Isom, chair of the personnel and finance committee, said the utilities fund is being replenished now that people are paying their water bills again. However, he said it’s still not yet back to normal, and this transfer will tide the city over. Commissioners then voted to approve the transfer.
