Huber Heights officials are considering asking voters in November to increase the city's income tax rate from 2 percent to 2.25 percent — 0.1 percent less than what was initially proposed two months ago.
City leaders have spent the last two months gathering feedback and examining how the city can maximize its resources, as it prepares to ask voters for a 0.25 income tax increase in order to maintain current public service levels.
The issue, if passed, would generate $1.7 million annually in new revenue — helping to fill a projected gap in the city’s budget at the end of 2015 and preventing potential cuts to public safety personnel.
If the issue fails, the city will cut $2.3 million, including reductions of nine fire/EMS personnel and seven police officers.
The first reading of the proposed ballot language — to increase the income tax rate to 2.25 percent for a 10-year period to support police and fire operations — will take place at Monday night’s City Council meeting, city manager Rob Schommer said. The second and third readings will occur at the June 9 and June 23 meetings, respectively.
“We are investing in the fact that we are continually growing our tax base,” Schommer said. “We’re convinced our plan so far has worked and will continue to work, and we can reduce our ask by a tenth of a percent.”
Huber Heights Mayor Tom McMasters said the sooner the city decides what the income tax measure will be, the better informed the voters will be, regardless of whether they’re for it or against it.
McMasters said he realizes the city needs additional revenue, but he’s not on board with a 10-year measure.
“We haven’t done all the evaluations yet, so how do we know the other investments aren’t causing a good portion of the shortfall?” McMasters said. “My problem is I don’t think the analysis is there to show us that they’re good decisions. I don’t have evidence that we’re wasting money, but I still think things need to be talked through.”
If the income tax measure fails, the $2.3 million in cuts will be phased in, Schommer said. The reductions include:
• City hall ($525,000): Reductions in support services to public safety personnel and operations.
• Parks and recreation/senior center ($225,000): Loss of seasonal personnel and other park amenities.
• Fire/EMS ($723,500): Reduction of nine fire/EMS personnel.
• Police ($797,000): Reduction of seven police officers.
The income tax levy is one component of the first part of a six-part plan that the city is calling the 2025 plan, which is designed to improve the city’s debt position and reduce risk.
Other components of part one that will fill the $2.3 million gap are reallocating fire capital monies from current income tax to fire operations ($450,000) and reassigning existing program costs to non-operating funds from the general fund ($150,000).
Councilman Mark Campbell, chair of the Administration Committee, said the committee challenged staff to see if the 0.35 percent tax increase initially proposed could be reduced after the first presentation was made in early March.
“We’re not going to tax our way out of it,” Campbell said. “We’re going to have to grow our tax base. This allows enough time to grow our way out of it. We’ve got genuine momentum built up, and we’ll continue that growth.”
Also at the end of 2015, 0.25 percent will fall off the city’s current income tax rate — a 10-year tax measure that took effect in 2006 and brings in $1.6 million annually. The city will seek a 10-year renewal of that 0.25 percent in 2015, Schommer said.
Since 2008, Huber Heights has lost $13.7 million in governmental revenue. Among the sources were a 0.25 percent reduction in the city’s income tax approved by voters in 2008, and the elimination of the state’s local government fund and estate tax.
The economic recession also cost the city an additional $8 million during that same time, Schommer has said. Huber Heights has increased its budget by 1.6 percent since 2008.
Huber Heights collected $9.7 million in income tax receipts in 2013. The city collected $11.8 million in 2008.
Huber Heights voters rejected a 0.25 percent income tax increase by a 2-to-1 margin in March 2012.
Representatives from the Huber Heights Liberty Group, a subgroup of the Dayton Tea Party, could not be reached for comment.