Merits of income, property taxes debated
Beavercreek wants stability, flexibility but past measures failed.
BEAVERCREEK — As residents here are considering city council’s third income tax request in 10 years, city officials say they went back to the drawing board to come up with a proposal that addressed people’s previous concerns.
“We have been relying for 40-plus years now on property tax, along with all the grants our staff can muster to maintain our city services,” said Mayor Bob Stone. “If the income tax were to be passed, it would create a community that is extremely stable, no matter what comes next. We are also trying again because we are trying to listen to the public. While we were willing to do a lot of things they’ve asked before, we didn’t put it in writing.”
City council passed a joint resolution Monday night stating that if residents approve the 1% income tax in May, the city will eliminate five different property tax levies: three for police and two for streets.
Officials estimate that the income tax would generate $12.6 million in the first year (2023), and about $18 million at full collection. It would first go toward hiring five additional police officers, and five public service workers.
The money would also go toward addressing the city’s $200 million in proposed infrastructure projects, which include stormwater management, addressing flooding issues in older parts of the city, and road work.
Beavercreek residents have previously voted down similar income tax proposals. In 2013, an income tax levy was rejected when 61% voted against it. The November 2020 vote was closer, with about 52% voting against it.
Resident Noah Gorski cited these previous failed attempts in comments to council Monday, saying the council’s measure felt like an “echo chamber.”
“Property tax is going down very little compared to how much income tax is going up. When it comes down to it, it’s a very large tax increase, and most residents here don’t want a very large tax increase,” Gorski said. “It’s a little concerning since we know there’s public support for no increase, and then the elected members are sort of working against us, and I’d rather work together on that.”
If the income tax passes, Beavercreek property owners would see an estimated property tax reduction of $134 per $100,000 of home value annually. A 1% income tax would cost a person with $50,000 of taxable income
$500 per year.
The 1% earned income tax would not be assessed against Social Security payments, military pay, interest, dividends, or capital gains and some other categories. The measure also includes a 100% credit for taxes paid to other cities.
The income tax would most significantly affect people who work in Beavercreek and live in a township, as well as Beavercreek residents who work in the city, or in a township, as those people currently do not pay any local income tax.
People who live in Beavercreek and work in a city that has an income tax wouldn’t see any change, as Ohioans pay income tax to the city where they work before their city of residence.
Census data indicates about 23,000 people work in Beavercreek but live elsewhere, about 16,000 people live in Beavercreek but work in other cities, and 3,000 people both live and work
in Beavercreek.
An income tax would require those who live elsewhere but work in Beavercreek to pay into services that the city provides, Stone said.
“The revenue has to come from somewhere. My personal goal if the income tax is passed, there is no foreseeable reason to pass more property tax, and I would hope for further reduction,” Stone said.
Revenue generated from income tax has more flexibility than property tax funds specifically allocated to roads
or police or fire.
According to City Manager Pete Landrum, Beavercreek is currently using a portion of its ARPA funds to address issues with stormwater near Grange Hall Road, an issue that would not have been addressed if not for that federal money. The city also seeks grants for many of its projects, but stormwater grants are practically nonexistent, and often require a city match, Landrum said.