Voters could be asked to improve new income tax

Budget shortfall projected in Riverside over next few years.

RIVERSIDE — Riverside is considering asking residents to increase the city’s income tax as it faces a projected budget shortfall in the next few years.

Riverside city manager Mark Carpenter suggested at a Jan. 14 work session that city council members consider placing a measure on the ballot that would increase the income tax anywhere between half a percent and 1%.

The city’s current income tax is 1.5%

The raise is needed, Carpenter said, because the cost to operate the city is rising at a time when revenues are not increasing to match it. Revenues are rising by about 1% a year, while the cost to maintain the city’s current staffing levels is going up at a much higher rate.

Personnel costs, for example, are rising at 2% per year, while health care costs are projected to rise at 11% per year, according to Carpenter.

“We have a few years, but either we have to be sustainable making drastic cuts, or we’re going to have to raise revenues,” he said.

A 1% increase would bring the revenue levels to sustainable levels through 2029, according to projections Carpenter presented.

Carpenter noted that other surrounding areas have a 2% or higher income tax.

Beavercreek is the only nearby town to Riverside without income tax, but property taxes are higher, he noted.

He said other cities are paying higher salaries to their administrators, and the costs to run Riverside is close to other nearby cities. The city was discussing hiring more people, but that’s not possible at their current budget, he said.

“What people don’t realize, a city our size, we have 70 fulltime personnel, which is, if you look at cities our size, they have more people,” Carpenter said.

Council member Brenda Fry said during the meeting it was not reasonable to put a measure on the ballot every five years to raise revenues, and suggested the council look at the budget again to make it sustainable in the long term.

“What I’m saying is that’s not a reasonable expectation for the amount of tax collected, every five years, to be increased,” she said.

Council will consider the matter again in February. If it is placed on the ballot, council suggested it would be in August or November.