Canfield city residents to vote on Aug. 4 ballot measure for half-percent income tax increase

By ROBERT CONNELLY

rconnelly@vindy.com

CANFIELD

City residents will have before them a half-percent income-tax increase on the special Aug. 4 ballot. City leaders say that this increase is to maintain the services the city offers now.

Canfield is asking for a half-percent raise on the city income tax to generate an additional $1.5 million annually. The city enacted its 1 percent income tax in 1972. If passed, the effective income- tax rate would be 1.5 percent Jan. 1.

For example, a city resident who works in the city earning $100,000 a year currently pays $1,000, and that would increase to $1,500 if the half-percent income tax is approved by voters.

City Manager Joe Warino has said 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 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.

Warino also has cited money lost from local government funds, both from the state and county, and the loss of the estate tax. Those three combined brought in $525,191 in 2010 compared with $248,482 in 2014.

That also is combined with further cuts on the way from the most-recent biennial budget signed by Republican Gov. John Kasich.

A part of that budget included eliminating taxes on small businesses. That means the state budget will continue the current 75 percent tax cut for businesses under $250,000 in business income, and then the taxes are eliminated in fiscal year 2017, which begins July 1, 2016.

For small businesses above that income level, Ohio will establish a new 3 percent tax rate.

“We won’t see the effect of it until 2016,” Warino said. “If we have to exempt small businesses, that will certainly be another cut of the pie we can’t absorb.”

Warino said there were “probably well over 100 small businesses in the city” but only a handful above that $250,000 threshold. Those include Giant Eagle, Star Extruded Shapes Inc., Farmers Bank and Fairway Ford.

This is one of the reasons city leaders decided against a 0.375 tax increase. City leaders, worried about future state cuts back in April, decided to pursue the half-percent increase.

Residents, such as Frank Micchia, have questioned why the city pursued a special election ballot. Warino and other city officials have said they want the half-percent income tax vote to be by itself on the ballot and not “muddied” by other ballot issues.

He has not publicly said if he is against or supportive of the income-tax increase.

“There’s a reason we haven’t increased the [income] tax since 1972 and all the things we’ve had in the city” have been able to be maintained with that 1 percent rate, said Don Dragish Jr., president of Canfield City Council.

He echoed Warino that Kasich has cut the city’s budget 17 percent and compared it to homeowners and their finances. “It would be hard to maintain the same amount of living” with 17 percent cuts “and that’s what we’re trying to say,” Dragish said.

“If it fails, we will put it back on in November,” Dragish said.

The deadline for the November ballot is 4 p.m. Aug. 5, the day after the special election.

A social media campaign began July 1 with a Facebook page named Canfield Citizens’ Initiatives, which has been pumping out specific revenue figures explaining why the city is asking for additional funds.