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Athens City Council is looking at a proposal to increase income taxes

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ATHENS, Ohio (WOUB) — The Athens City Council is moving forward with a proposal to put an income tax increase on the ballot in May.

Athens City Hall is seen in Athens, Ohio, on Tuesday, June 22, 2021. [Joseph Scheller | WOUB]
Athens City Hall is seen in Athens, Ohio, on Tuesday, June 22, 2021. [Joseph Scheller | WOUB]
At Monday night’s meeting, the council heard the first reading of an ordinance and a resolution to put a two-tenths of a percent income tax increase before voters.

The council will take a vote after the third reading.

A two-tenths increase means someone with taxable income of $50,000 would pay an extra $100 a year. Someone with taxable income of $30,000 would pay $60 more.

The city tried to raise income taxes earlier this year with a three-tenths increase on the ballot, but it was voted down.

The income tax flows to the city’s general fund, most of which is used to pay employee wages and benefits. Over the past couple of years, tax revenue has been falling behind expenses.

“When your revenue is not growing along with your expenses, the only way a city can keep pace with that is to ask the citizens to vote for an income tax increase. It’s simple math at the end of the day,” said Mayor Steve Patterson.

Patterson addressed a common misconception that the city is also funded through property taxes, which have risen significantly with the increase in home values. The city receives very little property tax revenue, Patterson said. It is collected by the county and most of the revenue supports schools and county services.

Councilmember Beth Clodfelter noted the city has also been trimming expenses to address the revenue shortfall and the budget proposed for next year includes a relatively small increase in spending.

“It’s definitely the lowest increase we’ve seen in a long time because of the reductions in spending that the city has proposed for next year,” she said.

One of the biggest expense drivers is healthcare costs, over which the city has limited control.

“Healthcare costs are not going down. Healthcare costs are actually exponentially increasing year after year,” Patterson said.

If voters approve the tax increase, it would take effect in 2027. This means the city would not collect any additional tax revenue until tax returns are filed that year.