Issues 37 & 38: Oberlin voters will be asked to keep income taxes on the books

OBERLIN — City officials are relying on voters to embrace two income tax levy renewals worth a combined $2.6 million per year. Issue 37 on the fall ballot is a 0.6 percent income tax that's been on the books since 2015 and generates about $1.9 million annually. If passed, it would be collected through 2035. Issue 38 is a 0.2 percent income tax that first went into effect in 2005 and generates about $647,000 per year. If passed, it would be collected through 2030. Both are due to expire Dec. 31, 2024. The taxes go straight to Oberlin's general fund, which is used for the city's day-to-day operations such as police, firefighters, code enforcement, parks and recreation and other basic services. "The general fund is all about quality of life," Oberlin Finance Director Sal Talarico said. "This is a critical piece of how we pay for these expenses." Income taxes account for 58 percent of all revenue to Oberlin's general fund, Talarico told City Council in a presentation earlier this year. It showed that Oberlin — with a 100 percent forgiveness policy for residents who work in other cities — is in the middle of the pack for municipal income tax rates. The two levies on the Nov. 8 ballot do not represent the full amount the city collects in income taxes. This year, it's on track to collect $8.1 million total. Annual expenses have grown from just under $5 million in 2000 to $12.4 million this year, Talarico's numbers show. During that period, cuts to local government funding from the Ohio General Assembly, paired with weak interest rates and the elimination of the estate tax, have dealt punches to the city's budget, he said. Given the political winds in Columbus, chances are near zero for the Legislature to reverse course on either local government funding or the estate tax, Talarico said. Interest rates are rebounding slightly right now, he said — the Federal Reserve has raised rates once this year and is signaling it may do so again. But Talarico said that will provide only the slightest of benefits to Oberlin, and it will not be permanent. Nor will property taxes from the Nexus gas pipeline save the day. The line cuts through town on a small piece of property, generating less than $30,000 per year for the city, Talarico said. It generates significantly more for Oberlin and Firelands school systems outside the city limits, he said. The best way to bolster the city's revenue is to attract new businesses to town, which grows income tax collections, he said. If voters reject Issues 37 and 38, Talarico said there will be time to try again before the income taxes expire. He said there would not be draconian cuts to services right away, but without the taxes City Council would have to find ways to cut costs dramatically. The good news, he said, is that Oberlin voters have "seen the results of their tax dollars in use and trust the city to use them wisely," he said. That's based on the outcomes of previous elections, in which levies have been overwhelmingly supported, he said. Jason Hawk can be reached at (440) 329-7122 or news@lcnewspapers.com.