The city is considering asking West Carrollton voters next year to make permanent a 0.25 percent income tax hike.
West Carrollton has lost more than $1 million annually in funding due to state action and is projecting future general fund deficits, according to the city.
The city last year considered a ballot issue, but opted against it. Discussions about asking voters for the permanent change have occurred in recent weeks, West Carrollton City Manager Brad Townsend said.
The income tax increase to 2.25 percent was approved three years ago and is set to expire in 2018. The tax hike generates about $600,000 for the general fund, which may break even this year but projections show deficits in the future, said West Carrollton Finance Director Tom Reilly.
Townsend said the city may put an issue on the ballot next year asking voters to make the tax hike permanent.
“Columbus is taking away money faster than we can replace it,” Townsend said.
Ohio’s House Bill 5, passed in 2015, 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.
House Bill 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.
Other past state funding reductions include the elimination of the estate tax, public utility tax reimbursements, and tangible personal property tax reimbursements, according to the city.
Funding issues prompted the city last year to eliminate its dispatch center and contract with Centerville. The five-year deal for handling police and fire calls saves about $300,000 a year.
Meanwhile, the “city is doing everything it can to bring in new economic development, but the state is taking funds away faster than we can catch up,” Townsend said in a statement released by the city.
The city has been “holding our own” in 2016 in an effort to curtail spending after projecting to finish the year $270,000 in the red, Mayor Jeff Sanner said.
That came, in part, due to issues the city cannot control, Reilly said, such as savings in workers’ compensation costs. But health care costs may be on the rise.
“We’ve been doing really well at getting single-digit increases in our health insurance,” he said. “So that’s what’s kind of saved us to this point. But everything’s up in the air with health insurance, so we don’t know.”
Current projections call for a 2017 general fund budget - approved by city council last week - that has a deficit of $224,000 with the city reserve fund holding at about $1.5 million. Projections made last year showed the reserve fund dipping to $700,000 in 2018 and $100,000 the following year.
Reilly said he hasn’t had any “formal” talks with city council yet about future year projections, but deficits are projected.
WEST CARROLLTON GENERAL FUND (IN MILLIONS)
YEAR REVENUE EXPENSES BALANCE
2016 $7.46 $7.68 $1.5
2017 $7.5 $7.7 $1.5