credit. In other words, each taxpayer that currently receives a credit will still receive 90% of that credit, and the maximum credit will be 2.25%.
This method ensures that all Oakwood residents who have taxable income will pay at least one-quarter of a percent (0.25%) to the city in which they live, and it ensures that no one's local tax burden will increase by more than one-quarter of a percent (0.25%).
Council and staff have looked at this issue from every direction and feel this is the most balanced and appropriate way to spread the impact over the broadest base of residents, yet in the smallest way possible. Our 34 member citizen Budget Review Commission has reviewed the proposal, and several others, and as reported by Mr. Dickerson, unanimously concurs with this approach.
Vice Mayor Byington then read the entire preamble text, which describes the lengthy process that has brought Council to introduce this ordinance.
WHEREAS, the elected officials of the city of Oakwood, Ohio, are responsible for the city's fiscal well-being; and
WHEREAS, over the past five years, the Ohio legislature has taken steps that have dramatically reduced revenues to the city of Oakwood and many other local governments in the state, most notably the repeal of Ohio's estate tax, cuts to the Local Government Fund, and the imposition of so-called municipal income tax reforms; and
WHEREAS, Oakwood has not increased its income tax rate since 1984; and
WHEREAS, over the past ten years, tax rate increases in 24 other cities – including most recently the cities of Dayton, Centerville and Moraine – have resulted in a loss of nearly $800,000 in annual revenue to the city of Oakwood because Oakwood gives full credit for taxes paid to other jurisdictions; and
WHEREAS, through ongoing dialogue with Oakwood residents, Council has determined that a majority of citizens appreciate the comprehensive and first-class city services and desire to keep those services; and
WHEREAS, to the best of its ability, Council has focused on reducing the city's expenses by limiting expenditures to those that are necessary for maintaining the operation of the city in a responsible manner, and by increasing fees for services that are appropriate for payment by the users of those services rather than general tax revenues; and
WHEREAS, Council has recognized and communicated to the citizenry that cost-cutting and user fees alone are inadequate to close the budget shortfall and that it will become necessary to enhance the city's revenue stream through tax increases in order to stabilize the city's financial position; and
WHEREAS, in May, 2013, Council placed a 3.75 mill property tax levy on the ballot that was approved by a margin of 55% - 45% and generates approximately $1 million annually; and
WHEREAS, Council has consistently communicated to the citizenry that this new property tax revenue by itself would fall short of providing the additional money needed to maintain existing service levels and that additional revenue would be needed; and
WHEREAS, in spite of Council's efforts to increase certain revenues and to reduce, eliminate, and/or minimize expenses relative to the operation of the city, combined revenues from all sources to the city are forecast to be insufficient to cover the city's essential budgeted expenses; and
WHEREAS, having discussed and reviewed revenue options with the 35 citizen members of the Budget Review Committee, City Council has concluded that the most appropriate and balanced means to generate the additional revenue needed to maintain city services at current levels is to reduce the credit Oakwood citizens currently receive for taxes paid to another municipality; and
WHEREAS, by taking this action, it is estimated that the city will collect approximately $600,000 in additional annual income tax revenue, thereby helping to offset the $800,000 loss and allowing the city to continue maintaining critical public infrastructure and providing the finest city services.
This is a first reading of the ordinance, so Vice Mayor Byington made no motion.