If city can’t meet budget, voters could face temporary tax hike

City struggling to collect income taxes

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By Lucas Sullivan, Staff Writer Updated 1:20 AM Wednesday, August 11, 2010

DAYTON — Dayton City Manager Tim Riordan could ask city leaders “within a couple weeks” to support an income tax increase to fix a deficit in the operating budget that could drop by $17 million next year.

Mayor Gary Leitzell said Tuesday, Aug. 10, he would endorse a temporary income tax hike, but is against a permanent hike for fear it will drive business away.

Any income tax increase would have to go before voters and could be on the ballot as early as March.

Riordan wrapped up his two-month, 35-stop “listening tour” Tuesday at the University of Dayton Arena, telling members of the Carillon Civic Council the “city lives and dies on the income tax” and “there is no good option here.”

Changing the income tax isn’t the only option on the table. Other options include cutting expenses or quit investing in civic improvements.

The current income tax is 2.25 percent and is paid by people who live and work in Dayton. Raising the income tax to as high as 2.75 percent would tax a person making $40,000 annually an extra $200 and create $20 million in new revenue for the city.

Leitzell said he’s not convinced the city has reduced enough operating costs and wants better marketing of services to other jurisdictions such as water, trash or equipment maintenance.

He said an income tax increase would basically be “getting the same (services) for more (money). That isn’t a good deal. We have to make better use of what little we have.”

Voters last approved an income tax hike in 1984. A 0.25 percent increase in income tax would rank Dayton with Oakwood as the highest of area cities. Dayton ranks in the top 30 Ohio cities with the highest income tax, according to the state Department of Taxation.

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