Tax proposal faces fight

A Boardman trustee and an Austintown trustee
adamantly oppose a city income tax in the suburbs.

By DAVID SKOLNICK

CITY HALL REPORTER

YOUNGSTOWN — Youngstown plans to use its water system as leverage to charge an income tax to those working in Boardman and Austintown.

The city is proposing to Boardman that workers at every business in the township that gets Youngstown water be assessed a 2.25 percent income tax. Of that amount, 2 percent would go to the city and 0.25 percent would go to the township.

A similar proposal to Austintown is forthcoming, said Mayor Jay Williams and Sarah Lown, the city’s development incentive manager. The city hired Lown last month to work on implementing its ambitious economic development plan that was first proposed in August 2006.

The Boardman plan would see the city collecting about $8 million annually from those who work in the township, Lown and Williams said. The township would receive about $1 million under the plan, they said.

Lown met with Boardman officials Friday to discuss the plan.

“We’re mostly looking for advice and input,” she said.

The city will begin discussions with Austintown in about a month, Lown said. It wasn’t known Monday how much money would come from a similar plan with Austintown.

Youngstown originally was going to also approach Canfield city and township. But the focus of the plan is solely on Austintown and Boardman, Lown said.

The proposal also calls for those who work in Youngstown to see their city income tax reduced from 2.75 percent to 2.25 percent. That reduction would mean about $8 million less in income tax collected from those who work in the city, Williams said.

In addition, those in Boardman who pay a 40 percent surcharge on their Youngstown water bills would see that percentage cut in half.

About half of Boardman receives water from Youngstown. Nearly all of Austintown gets its water from the city.

The 2 percent/0.25 percent split between the city and the township is a starting point in the negotiations between the two entities, Williams said. But it’s a “very valid starting point,” he stressed.

Williams said he hopes those in the suburbs would see this plan as mutually beneficial. The city would offer some of its economic incentive programs to businesses in the two townships, reduce the water surcharge fee and the city’s income tax rate.

Boardman Trustee Kathy Miller opposes the Youngstown plan.

“Adding taxes is not the solution to the problems of local government,” she said.

“If a 2.25 percent income tax is deducted from the wages of people who work in Boardman, it will provide only a small amount of revenue to Boardman and a large amount of revenue to Youngstown, she said. “This makes absolutely no sense for the business owners and people employed in the township.”

Boardman is having financial struggles facing a $3.4 million deficit by the end of this year.

“Supplying water should not be used by the city of Youngstown as a disguise for getting more money to take care of the problems in the city,” Miller said.

“The risk to the commercial viability of Boardman and other townships in the county is too great. ... A 2.25 percent income tax on employees in Boardman Township could have consequences for the taxpayers of Mahoning County, not just Boardman, if there is any reduction in the amount of sales tax that is collected.”

Boardman Trustee Larry Moliterno was unfamiliar with what the city is proposing.

Trustee Robyn Gallitto and Township Administrator Jason Loree couldn’t be reached to comment Monday.

Austintown Trustee Lisa Oles said details of Youngstown’s plan that she heard from Boardman officials are “laughable” and called the proposal “taxation without representation.”

Oles said she would call for a boycott of all Youngstown businesses, seek removal of “county seats” such as courts and other county offices from Youngstown and would thwart the city’s efforts by turning the township into a city if necessary.

Austintown Trustee David Ditzler said the township is researching the question of becoming a city and looking for support from legislators so that townships could shift some of the tax burden to sales taxes and away from property tax payers.

He said of Youngstown’s proposal: “If it doesn’t benefit this township, we will not be bullied into a corner.”

Trustee Bo Pritchard said he has seen the positive things that have happened in the Akron area, where joint economic development districts have been established. But he has always advocated that such agreements take income tax money from workers whose jobs were newly created by such districts, not from all workers in the district.

A $100,000 study commissioned by the city in August 2006 is nearly complete, Williams said.

XContributors: Staff writers Denise Dick and Ed Runyan

skolnick@vindy.com