News
Athens city officials made their case for a proposed income tax increase at a town hall meeting
By: David Forster
Posted on:
ATHENS, Ohio (WOUB) — Athens city officials say they got the message residents were sending when a proposed income tax increase last year was soundly defeated at the ballot.
“We didn’t come to you early enough. I don’t think we explained this well enough,” city Treasurer Josh Thomas said at a town hall Tuesday night at the community center.
The event was an opportunity for city officials to make their case for a proposed two-tenths of a percent increase in the city’s income tax and answer questions.
A handful of people showed up, although it’s unknown how many people may have tuned in to the live stream or watched it later.
Thomas prepared charts for the meeting detailing how much additional revenue the city would collect if the tax increase passes in May and how the money would be distributed.
Another chart showed how much additional tax residents would pay based on their income. For example, someone earning $30,000 a year would pay $60 more each year; someone earning $50,000 a year would pay $100 more.
City officials say a tax increase is needed because revenues are not keeping pace with expenses. This is something the state auditor’s office flagged in a review of the city’s finances two years ago.
The audit noted, among other things, that the city’s income tax revenue was declining and so was the amount of money available in reserves for unanticipated expenses.
Thomas said this report factored into the city’s decision to put a three-tenths of a percent income tax increase on the ballot last May. It was rejected by 57 percent of voters.
Mayor Steve Patterson said at the town hall he believes the city was asking for too much given the significant increases people were seeing in their property taxes, along with other rising expenses.
He noted that people might assume these property tax increases benefit the city. But it receives only a small portion of property tax revenue, most of which goes to support schools and county services.
Nonetheless, Patterson said he took last year’s vote as a message to the city that it needed to tighten its belt first and then go back to voters with a smaller ask.
The city has done that, Patterson said. It has imposed a soft hiring freeze, trimmed some expenses and offered an early retirement plan to older employees. He also noted the 2026 budget adopted by the City Council in December represented one of the smallest year-over-year budget increases in many years.
That budget, however, may already be coming up short. Just a few weeks after passing it, the council was advised the city may not have enough money to meet some of its budgeted expenses, particularly for health care. The council voted to give the city auditor authority to make revisions as needed.
Employees are by far the city’s biggest expense, and medical costs for these employees are one of the biggest cost drivers. Since 2017, healthcare costs have increased 47.2 percent while income tax revenue has increased 26.7 percent.
Patterson said the city tries to offer a competitive health plan so it can attract and retain good workers. And making changes to the health benefits offered is not something the city can simply do at its discretion.
Many of the city’s employees belong to one of four unions, and any changes to pay and benefits must be negotiated when the contracts come up for renewal. Because of the renewal cycle, this process can take years. Patterson noted that as a matter of fairness, the city offers the same health benefits to its nonunion employees.
If the proposed tax increase fails again in May, the city will have to make more cuts and the soft hiring freeze may become a hard one, Patterson said. Without full staffing, employees would be stretched even further, he said, which could result in the city having to scale back on some services.
For example, the city may simply fill potholes instead of repaving streets in need of a full restoration and replacing the outdated pipes and other infrastructure underground at the same time.
Thomas said he suspects many people choose to live in Athens for the same reasons he does: “I like the services it provides. I like the parks and recreation. I like that we’re a safe city. We have a good police force. We have a good fire department.”
The proposed income tax increase is about preserving that, Thomas said.
“We’re not looking to add anything. We’re not looking to start a big new project,” he said. “It’s not like we’re going to say, great, we got an income tax increase and now let’s go do this new extra thing. … We want to maintain the services that you folks have come to enjoy and maintain the town that you want to live in.”
Aaron Thomas, a longtime local business owner who attended the town hall, said he understands the financial pressures the city is facing. He is facing them himself as a small business owner. The last time he filled up his diesel work vehicle, it cost nearly $6 a gallon. He said he cannot always pass these costs along to his customers.
“I understand the city is facing the same thing with their vehicles,” said Thomas, who owns A-Roc Entertainment. “Their health insurance is up. Guess what? My health insurance is up. … But as a business owner, it’s up to me to look at how can I pivot, make changes, cut costs or try to find some way to save money to continue to keep my business running.”
Thomas said he appreciates all the services the city provides, such as the community center, the parks, the ball fields and the bike path. And he acknowledges that the costs to provide all these services are rising.
“But it’s up to the city as a business, as a city, to look and say, alright, what can we do?” he said. “Can we go out and negotiate these rates with our unions? Can we go negotiate pricing on fuel? Can we figure something out to find something to mitigate some of these added expenses? As a business, that’s what you do. If not, you’re out of business.”