Voters in West Carrollton next month will cast ballots on the city’s request to make permanent a 0.25 percent income tax hike approved in 2013.
The city needs to maintain the 2.25 percent rate that generates about $600,000 annually due to state action that has led the city to losing about $1 million in revenue annually, according to city Finance Director Tom Reilly.
Passage of Issue 13 on May 2 would fund general operating expenses, according to the Montgomery County Auditor’s Office. But it would primarily benefit police and fire services, which receive about 65 percent of those funds, City Manager Brad Townsend said.
The income tax revenue, which goes into the city’s $7.6 million general fund, also pays for other items, such as parks and recreation expenses, he said.
“So, if they’re happy with their services, it’s not a tax increase,” Townsend said. “It merely continues what they’re already paying. We would hope that they support it.”
Cuts in the local government fund, the elimination of the estate tax, public utility tax reimbursements, and tangible personal property tax reimbursements have also cut revenue streams, according to the city.
These cuts challenge municipalities - as they should - to be more accountable in using taxpayers’ money, said Greg Lawson, policy analyst for the Buckeye Institute of Public Policy.
“It’s really important that local governments are able to justify what they’re spending their money on,” he said.
While not in favor of higher income taxes, the Buckeye institute is “actually comfortable with local taxpayers making that decision,” Lawson said.
“If voters say we want to pay higher income taxes for whatever the service is, then that’s a decision that local taxpayers can make,” he said.
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Other funding reductions came through state legislation, city officials said. The passage of Ohio House Bill 5 in 2015 – which involved changes in municipal tax collection - has already cost the city about $100,000. When fully implemented, it will reduce city revenue by about $400,000 annually, according to the city.
HB 69 put guidelines on cities’ red-light cameras that did not make it cost effective to operate West Carrollton’s program, Townsend has said, removing another $125,000 of revenue from the city.
The city is spending about $200,000 a year more than it is taking in “just to get by” and is operating at 2000 budget levels, Townsend said.
West Carrollton Mayor Jeff Sanner has said he has “no doubt” the city will need to keep the tax hike in light of state cuts.
Four years ago, nearly 54 percent of voters supported a five-year income tax hike with the issue passing by 75 votes, according to the county board of elections.
Meanwhile, the city eliminated its safety dispatch center and contracted those services with Centerville.
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