Canfield residents will decide on a half-percent income tax increase at the Aug. 4 ballot

CANFIELD

City residents will decide on a half-percent income tax increase at the Aug. 4 ballot.

City council on Wednesday unanimously approved putting the tax issue on the special election ballot.

That additional half-percent income tax – making the effective income tax 1.5 percent – would generate another $1.5 million annually for the city. The city initiated its 1 percent income tax in 1972.

City Manager Joe Warino detailed that general fund expenditures have risen while general fund revenues have steadied or gone down. The difference between the two was a surplus of $170,372 in 2010, a deficit of $613,149 in 2011, a surplus of $743,373 in 2012, a deficit of $245,080 in 2013 and a surplus of $97,540 last year.

Warino further explained that there was an influx of about $200,000 in 2011 due to selling a city-owned property and another influx of about $358,000 in 2012 from selling stock. He added that the city eliminated longevity pay for employees a few years ago, bringing about $20,000 back to the general fund.

“Costs aren’t going down and our reimbursements and revenue are going down,” said Councilman John Morvay.

Warino further explained the money lost from local government funds, both through the state and county, and the loss of the estate tax. Those three combined brought in $525,191 in 2010 compared to $248,482 in 2014.

“For us to replace those dollars, we have to ask our residents” for funds, said Councilman Chuck Tieche.

City officials discussed the possibility of an operating levy to generate dollars for the city, but decided that an income tax would not affect retirees and others living on a fixed income.

Council also pointed out that currently, if a resident works in a city where their wages are subject to an income tax, they would pay the Canfield income tax at a rate of 0.5 percent instead of the full rate of 1 percent.

Morvay said the question for voters will be: “Based on your salary, do you want to maintain the level and quality of service” provided now?