City Council has taken the first step toward placing an additional five-year, 3.75-mill property tax levy on the May 2013 ballot.

Council passed a resolution declaring the need for a levy and requesting that the Montgomery County auditor certify how much revenue would be raised, based on property valuation in the city.

Director of Finance Cindy Stafford said Oakwood estimates the levy would raise $1.06 million a year, “not counting a predicted 5 percent decline in property values. That would be the basis for the levy.”

Even if property values rise during the time the levy is in place, “the amount would be capped on where it begins,” Stafford said.

The owner of a home valued at $200,000 would pay an additional $229.69 per year.

“That’s about 63 cents a day for the best public services in the region,” said Mayor Bill Duncan.

City officials say tax increases are needed to help make up for a $3 million annual budget shortfall beginning in 2013, because of the elimination of the Ohio estate tax and reductions in local government fund reductions.

Oakwood has accounted for about half of the amount through budget cuts and fee hikes. A stormwater utility fund is being collected. Fees have been raised for trash collection and use of the Oakwood Community Center, among others.

Council and staff also are considering a reduction in the city’s income tax credit, which would result in higher payments from city residents who work in other municipalities.

Oakwood’s income tax rate is 2.5 percent. It currently offers full credit to residents who work elsewhere. Those who work in Dayton or Kettering, for example, receive credit for the 2.25 percent income tax they pay there and owe Oakwood only the remaining .25 percent. That amount would climb.

Duncan said the levy “will not grow with inflation. If it goes on the ballot and passes, we would not begin collecting it until 2014. If we decide to go ahead, we will vote in February on whether to put it on the ballot.”

Oakwood City Council generally meets on the second and fourth Mondays of each month.

The most recent Oakwood levy vote, a renewal, was approved 78-22. Oakwood City Schools also may have a levy for additional funds on the November 2013 ballot.