Voters in the Village of Swanton will decide on an income tax levy increase in May. Swanton Village Council last Monday approved placing the issue on the ballot.
“It is necessary to increase the income tax at this time to keep the village budget balanced and to continue to provide the same level of service throughout each department of the village,” said Michael Rochelle, Swanton Village Council member.
If approved, the income tax in the village would increase to 1.5 percent. It is currently 1.25 percent with a 50 percent credit for residents who work in a municipality where the income tax rate is over 1.0 percent. The credit would remain if the increase is approved.
In Swanton, an increase to 1.5 percent has failed three previous times, twice in 2001 and once in 2005. The rate was last increased in 1989 when it went from 1.0 percent to 1.25 percent.
At the current rate, the income tax brings in about $1.3 million of the $1.6 million revenue in the village’s general fund.
“Income tax is only collected on earned income, not on Social Security, retirement, or income from investments,” Village Administrator Rosanna Hoelzle said. “A portion of the income tax is spent on capital improvement projects, the rest is spent on general government expenses and the entire police department operation.”
The police department takes up the biggest piece of the general fund budget. In the 2017 temporary budget, the department accounts for 46 percent or $761,000 of the money approved for spending.
Increasing the income tax to 1.5 percent would bring an estimated $279,000 more in revenue each year, according to Hoelzle. “This increase in revenue would allow enhancements in public safety services and continue to make progress on capital improvement projects,” she added.
State funding cuts have impacted communities throughout Ohio over the past several years.
“The Village’s proposed income tax increase is partially necessitated because of a tremendous loss in state funding,” said Hoelzle. “Loss of funding came from a reduction in the revenue from the Local Government Fund, elimination of the Estate Tax, and the elimination of the Tangible Personal Property Tax.”
“With loss of funding comes conversations of other revenue sources,” said Hoelzle. “Annually, income tax revenue is the single largest source of funding for the village.”
“As an elected official, I want to maintain the level of services our community has come to expect and move forward as a village,” said Rochelle. “We all have experienced costs that have increased since 1989 and it becomes necessary to increase funding for the village too.”
The income tax in the Village of Swanton is among the lowest for area municipalities. Only Metamora and Lyons are lower, at 1 percent. Some areas do, however, have a more generous tax credit for residents, who also pay income tax in the municipality in which they work.
Area income tax rates are as high as 2 percent in Waterville, and 2.25 percent in Holland and Toledo.
Reach Drew Stambaugh at 419-335-2010