City leaders are making plans for how to function without a proposed 1.5 percent earned income tax that voters defeated on Tuesday.
Voters defeated the proposed tax 61.5 percent to 38.5 percent, a difference of 2,407 votes.
“We need to start the planning process and move forward,” Mayor Vicki Giambrone said. “The facts don’t change. We still have a $200 million infrastructure issue … and state cuts.
“We’ve already done substantial cuts already, and we’ll have to find more cuts and that likely means services.”
Opponents of the city’s proposed tax believe their victory at the polls Tuesday was rooted in past promises by city leaders.
“First, it was the mall that would solve everything and taxes wouldn’t be raised,” said Chad Whilding of Tax Busters PAC. “Then it was the Greene that would solve everything. Now they wanted an income tax to solve everything.
“People remembered and didn’t believe the income tax would solve anything.”
Proponents of the tax said the estimated $108 million over the tax’s seven-year life would have repaired roads and bridges, made up for state cuts and refurbished the city’s parks and buildings.
Beavercreek is one of only a handful of cities without an income tax. Unlike many cities, Beavercreek’s charter requires voter approval of an income tax.
Instead, the city’s local funding comes through personal property tax levies for specific purposes. Cuts in state funding, amounting to $2.3 million annually, plus a $200 million backlog in infrastructure projects convinced city leaders of the need for an income tax.
“We’ve been funding through property levies for 33 years and it works fine,” said Dave Brown, Tax Buster treasurer. “Why mess with something that works?”
Had the income tax passed, three property tax levies — two street levies and a police levy — would be allowed to expire over the next three years.
Council member Brian Jarvis said he wanted the 1-mill street levy expiring at the end of the year back on the ballot in November. “It funds our street program $1.3 million per year for capital improvement projects.”
Tax Busters’ Whilding said he didn’t think there would be any opposition to renewing the three levies. “When it comes to streets and police, those are vital functions, and we have always funded them this way. But any increases (in the tax) might be questionable.”
Jarvis said there had been no discussions yet whether to renew or replace the street levy or ask for additional millage. “The city financial director will have crunch the numbers before we make any decision.”
Renewing the levy would keep the amount raised at $1.3 million. Replacing the levy would place the 1 mill on current taxable value, increasing the amount raised.
Bellbrook is the only other city in the region without a income tax. City leaders there have said because there is little or no commercial or industrial activity in their city, there is no point in a sales tax.
Beavercreek was once like Bellbrook, a small semi-rural bedroom suburb. But in the intervening 33 years, the city has grown into a military, educational, commercial and medical hub with two malls and a host of small businesses.
The city estimates 75 percent of the those who work in Beavercreek do not live in the city. That means the city is losing out in an estimated $15 million annually in potential taxes. Income taxes are paid where you work not where your live, unless you work in a locality that does not have an income tax. In that case, the city where you live collects the tax.
Tuesday was the third time city voters have defeated an income tax.