UNION — City council adopted an ordinance under emergency status Monday night to provide for a permanent increase of one percent in the city’s income tax rate.
The existing income tax of one percent would become two percent if approved by voters. Council also passed a resolution to place the proposal on the May 7 ballot. If approved by voters the increase would take effect Jan. 1, 2020.
Facing needed infrastructure repairs such as street resurfacing, a road levy first put in place in 1978 was placed on the ballot in 2016 seeking an additional one mill increase to the existing 3 mill levy that was rejected by voters. The existing levy only generates $250,000 a year, which was does not provide adequate funding to keep up with needed repairs, according to City Manager John Applegate.
“We have not had an increase in that levy since it was first adopted back in 1978,” Applegate said. “We have streets that are deteriorating and we need to spend additional money to bring them up to standard to help protect property values. We met with the budget committee last week and we are recommending that we increase our income tax from one percent to two percent, which would still be a full credit as it currently is.”
Applegate said if approved the city would begin a five year program of roughly $5 million to repair and resurface streets in the core part of the community starting with the oldest plat such as SpringView Acres in the Carol Lane and Lang Court area and moving up into the Hollycrest Lane and McCraw Drive area.
“This is something that really needs to be done,” Applegate noted. “We just don’t have the money.”
He pointed out to council that a lot of communities, the latest one being Clayton last year, spent a lot of money to bring their streets up to condition by adjusting its income tax revenues.
“We are just putting bandages on the problems we have right now,” Applegate said. “This is a decision that has to be passed as an emergency in order to appear on the May primary ballot. There is a lot of information that we need to develop to inform our residents why we need this increase. We want to get together and create the information that will give people a good understanding of the money we use and how we use it, what it will cost them and let them decide.”
The tax is on earned income only. People working at P&G currently pay one percent to Union and 1.5 percent to the City of Dayton if they live in Dayton. Those that live in Englewood pay one percent to Union and three quarters of a percent to Englewood. The income tax does not affect pensions, Social Security or interest payment and other items excluded by the municipal income tax ordinance. It is only a tax on earned income.
“It pains me greatly to in any way to look at raising taxes,” said Council Member Robin Perkins. “The heated debate in the budget meeting the other night called out all evidence and all possible avenues for funding street maintenance and we just couldn’t find any. So let’s put it out there and let people vote on it.”
The only street resurfacing that has taken place in Union took place when the city received funding for Issue II projects for the water main replacement projects along Martindale Road.