North Ridgeville income-tax increase is necessary

There's a budget crisis coming to North Ridgeville. The city could hit deficit spending as soon as 2027 and could be facing a general fund budget deficit of $10.6 million by 2031, Finance Director April Wilkerson warned City Council. That's clearly an unsustainable path for any community, which is why most members of City Council voted to put a permanent 0.75 percent income-tax increase on the November ballot. Council members Holly Swenk, R-1st Ward, and Eric Shaffer, R-2nd Ward, voted against the measure, arguing during an Aug. 4 meeting that the proposed tax increase was being rushed before voters without examining other options. "I think it needs to be discussed more," Swenk said. "I think we need to see if there's places we can cut our budget rather than throwing it onto the people." We suspect that mindset will be shared by many North Ridgeville voters, all of whom have long enjoyed a low municipal income-tax rate. (Voters have rejected other efforts to raise the city's income-tax rate over the years.) While we appreciate those concerns, we also believe that residents would be unhappy if the city started slashing city services. Additionally, cities are not immune to rising costs. Mayor Kevin Corcoran, a Republican, told us Wednesday that he didn't believe the city could close its looming budget gap with cuts alone. Were voters to approve the measure, identified on the ballot as Issue 8, it would generate approximately $6.3 million in additional revenue annually for the city. Last year, the city collected about $17.4 million from income taxes, although not all of that went into the general fund. (The city's general fund spending is expected to run just under $20.9 million this year.) Corcoran said that the city's income-tax revenue is divided between the city's general fund, which receives 85 percent, and capital improvements, which receives 15 percent. The money going to capital improvements likely would be used in part to help the city buy land for a possible third fire station. The rest would go into shoring up the city's finances and expanding staffing in the Fire Department, which has 41 employees, the Police Department, which has 52 employees, and the Public Works Department, which has 55 employees. The plan, Corcoran said, initially is to add two new employees in each of those three departments and then see where the city's finances are before adding more. (North Ridgeville continues to grow, which is why there have been calls to expand city services.) It's a reasonable proposal, and one that voters should get behind. Not only is North Ridgeville's 1 percent income-tax rate among the lowest in the area, but the city has one of the lowest reciprocity rates, at just 0.1 percent. Issue 8 would increase the tax rate to 1.75 percent, which still is relatively low compared to some nearby communities. Corcoran told us that were the increase to pass, the city would increase its reciprocity to 1 percent. For the 80 percent of city residents who work outside the city, those changes would in many cases result in them paying lower income taxes. Take, for example, a North Ridgeville resident who works in Elyria. Under the existing tax and reciprocity rates, that worker pays Elyria's 2.25 percent tax rate in addition to North Ridgeville's 0.9 percent rate when reciprocity is factored in, according to a chart on the city's website. That means the resident is paying a local income-tax rate of 3.15 percent, the chart showed. Were Issue 8 to pass, the rate would drop to 3 percent. "It's a great benefit to people who work outside the city," Corcoran said. Not everyone would benefit. For instance, someone who lives and works in North Ridgeville earning $40,000 per year now pays $400 in city income tax annually, according to another city chart. That would rise to $700 per year were Issue 8 to pass. Corcoran said his family is among those who would pay the increased rate because both he and his wife work in the city. Additionally, non-residents who work in North Ridgeville would end up paying more. It's also important to note that the increase would have no impact on retirees because Social Security payments, along with pension and 401(k) disbursements, aren't subject to North Ridgeville's municipal income tax. We recognize, as city leaders have, that tax increases aren't popular, but sometimes they are necessary. Issue 8 is going to be a tough sell, but those North Ridgeville leaders who support the increase have made a strong case that raising the municipal income-tax rate is necessary for the city's long-term financial health. Voters should approve it.