By Terry Morris
Dayton Daily News
OAKWOOD, Ohio — It’s been 20 years since the city of Oakwood raised taxes to pay for services, but the next round may be looming.
Three variations of tax hikes are being considered due to a pending 20 percent, or $3 million, loss of city revenue.
Shared service agreements with other cities, added service fees, and cuts in staff and services are other options, none of which would come close to making up the shortfall on its own.
“We are not proposing any of these. At this point, we are still weighing all of them,” city manager Norbert Klopsch told about 100 citizens at the Feb. 29 town hall meeting.
“I think our solution is going to be some combination of the above,” he said.
The challenge arrives with the 2013 end of Ohio’s estate tax, which has contributed an average of $2.6 million a year to the city over the past decade.
In part because some in the city of 9,200 leave bigger inheritances than average, what has been very good for Oakwood is now going to leave a bigger void there than elsewhere.
Besides funding special projects and contributing to reserves, revenue from the tax has allowed Oakwood to maintain what Mayor Bill Duncan calls “Cadillac"- level safety and public works services without charging more for them.
Potential tax hikes include:
- A 0.25 percent boost in the city income tax rate from the present 2.5 percent, which is already higher than most other area communities. Dayton and Kettering are both at 2.25 percent. Centerville’s rate is 1.75 percent.
- Limiting the income tax credit to 1.5 percent, which means that most residents who work and pay taxes in other cities would owe Oakwood an additional amount. Those who work in Dayton now pay Dayton’s 2.25 percent tax and 0.25 to Oakwood - or 2.50 in total. They would still pay 2.25 to Dayton, plus 1 percent to Oakwood.
- Passing a new 3-mill property tax, which would cost the owner of a $200,000 house an extra $185 a year.
The income tax hike would bring in about $970,000. The added property millage would amount to $790,000 a year. Both would require voter approval.
The tax credit limit would raise $1.2 million and could be imposed by a vote of city council.
Cutting services in a city where residents are accustomed to having the best — snow removal that’s second to none and a police/fire/emergency response time of about two minutes — are also tough choices.
Police, fire and EMS represents 40 percent of expenditures. Public works is 22 percent.
The possibility of sharing fire and emergency medical services or police with other communities is being discussed.
So is hiring out snow removal, information technology systems, vehicle and equipment maintenance.
“We could save some dollars. The level of services we have is essentially the same as when I came here in 1992,” Klopsch said.
But partnerships don’t always save money.
“The cost of the county’s regional dispatch center has almost tripled in four years. I’m glad our community decided not to join it,” he added.
Oakwood has carved more than a $1 million from its budget since 2008. It has spent less than it budgeted the past four years as both income tax (39 percent of revenue) and property tax (12 percent) receipts have dipped. The 2012 budget is $13.39 million, not including water and sewer utilities.
Union contracts have been renegotiated. Some staff positions have been eliminated.
“We have a revenue problem, not a spending problem,” Dun-can said.
“We need to be careful about what we take away. Once you start pulling on those strings, what does that do to the ambience that is Oakwood?” he asked.
City officials will continue presenting the options in neighborhood meetings through June, Duncan said. In all, there will be 40 to 50 sessions.
Klopsch said the situation isn’t critical yet.
“If we have a good year, potentially, it will be two years before we have to do something. We will have the estate tax until 2013, but we will deplete the reserves in one and a half to two years.”
Copyright 2012 Dayton Newspapers, Inc.