Local Income Taxes in Warren County
City Rate Credit
Franklin 2 Full
Middletown 1.75 Full
Carlisle 1.50 Full
Monroe 1.50 Full
Springboro 1.50 1.0
Mason 1.12 Full
South Lebanon 1.00 .5
Morrow 1.00 .5
Maineville 1.00 .5
Lebanon 1.00 Full
Loveland 1.00 Full
Source: Southwestern Ohio Tax Administrators Association
Drivers in Lebanon are stuck between a pothole and a hard place as their community wrestles with a growing problem of how to pay for street repairs.
Local cities have made a patchwork of different decisions over how to pay for basic road upkeep and Lebanon is among the ones unable to settle on a stable source of money.
Lebanon city council recently restarted discussions of how to fill in an annual estimated $1.5 million deficit between street repair needs and funds on hand.
Last week, some council members blamed the depth of the problem on inaction dating back more than a decade.
“Council has not been willing in the majority to do anything,” said Jim Norris, in his fourth four-year term on Lebanon City Council.“It’s as bad as I’ve ever seen them.”
National problem
Finding money for repaving is a national problem, according to the National League of Cities.
For the first time since 2008, cities responding to the organization’s 2014 survey indicated they were rebounding from the recession and rebuilding their work forces as property and income taxes grew. Still local leaders remained concerned about their inability to pay for basic road repairs.
“We’re seeing this economic recovery, but they all cited infrastructure needs as having a negative impact on their city budgets,” said Nicole Dupuis, a senior associate for city solutions and applied research with the National League of Cities. “That’s one of things that is holding back local budgets from full recovery.”
The National Highway Trust Fund’s solvency is in question, leaving state and local policy makers to find money for the repairs, although they are less high-profile than new roads or economic development, Dupuis said.
“Projects like that don’t generate a lot of excitement, but are really important,” she said.
Cities have turned to user fees, tolls and public-private partnerships to offset road repair costs.
“Ballot measures have increased year by year,” she added.
Tipp City in Miami County uses a 10-year, 0.5-pecent income tax levy for capital improvements. Huber Heights draws on proceeds from a permanent 0.2-percent income tax for road repairs.
Voters in Beavercreek, which has no income tax, approved a five-year, 2-mill capital improvements levy for street repairs that is paid for through people’s property taxes.
Franklin voters increased to 2 percent the income tax paid by people working in the city, in part to help keep up on street repairs.
City officials note that the danger of getting behind on basic road upkeep is that problems just mount with every winter and it can take years to catch up
“Keeping up is really relative,” Miamisburg spokesman Gary Giles said. “From a big-picture standpoint, we’re still in catch-up mode somewhat in our annual street maintenance programs from 2010-2011, when a severe budget crunch forced us to do little to no work.”
Local money for roads typically comes from either income taxes, property levies or a combination of the two.
But since 2002 Lebanon voters have rejected four different proposals to raise money for road work: two income-tax plans, and two proposed street levies.
Meanwhile, a $1.5 million annual deficit has developed between needs and funds available, according to an analysis by City Manager Pat Clements presented to the council last May.
For several months, the council discussed seeking a road levy or income tax increase, or reducing the local income-tax credit, but has not mustered enough votes for action.
Lebanon has budgeted $680,0000 for road repairs this year. Last week its council again discussed how to get more money for road work, analyzing the budget for potential cuts, and weighing options ranging from seeking an additional tax levy to reducing the credit on earnings by residents who work outside the city.
“There is nowhere else to cut,” Steve Kaiser said. “We need to build more revenue.”
Repaving plans
According to an email survey by the newspaper, Miamisburg, Springboro, Troy, West Carrollton and Monroe are among of cities that draw on different general fund sources to pay for repaving and other street maintenance.
Monroe budgeted $1.1 million this and last year for local repaving, according to City Manager Bill Brock.
This funding was allocated after years when road repairs were put off while the city dealt with fiscal emergency and the economic downturn, according to Brock.
“We deferred some maintenance, but overall, we have kept up with our needs,” he said.
Most of Monroe’s road-repair money comes from the general fund, which is supported from a city 1.5 percent income tax.
Several towns raise money by reducing the ‘credit’ they give residents who pay income taxes to other communities where they work.
Those credits are often full, so that a resident of one town who works in another pays only the higher of the two local income tax rates. Reducing a credit means that a worker pays a full local income tax to the town where they work, then a little more to the town where they live.
Springboro, South Lebanon, Morrow and Maineville all have reduced-credits, which are approved by their local councils and don’t go up for voter approval.
Other communities use annual shares of the state taxes on gasoline and motor vehicle licenses to pay for road repairs.
In each of the past two years, $50,000 of Miamisburg’s road repair funds came from state taxes. This year, Miamisburg has budgeted about $190,000 less the $984,640 in 2014 funding for road maintenance.
Troy has recently spend $600,000 a year in street repaving - using $350,000 from the general fund and $250,000 from the state tax on motor vehicle licenses.
“As our road inventory continues to age, we anticipate that in the next five to 10 years we will need to increase our annual allocation to as much as $1 million per year,” Patrick Titterington, director of public service, said.
This year Springboro’s street fund budget includes more than $1.2 million, including a $261,070 carryover, $560,000 from the state gasoline tax and $110,000 from state motor vehicle tax.
“You can always repave more streets,” City Manager Chris Thompson said. “Our repairs stay current.”
Tipp City’s income tax levy is used for other things as well, but has paid about $500,000 a year for street repair work.
“This level of funding is believed to put the city on an 18-20 year resurfacing schedule (depending on future increases in asphalt and labor rates) to have all the city streets resurfaced,” said John Green, the city’s finance director.
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