After the defeat of a proposed 1% earned income tax, Beavercreek city leaders are now faced with a looming issue: how to continue paying for public services.
On Election Day, 13,887 Beavercreek voters rejected a 1% income tax, while 9,707 supported it. It would have been paid for by more than 24,769 non-residents who work in Beavercreek and about 3,180 who live and work in the city.
Mayor Don Adams said defeating this tax makes it harder to maintain operations amid rising costs.
"A city of 50,000 people not having the ability to have an income tax to help support the services strictly depending on property taxes, I don't think it's sustainable because property taxes don't grow with inflation," Adams said.
In Ohio, municipalities have two ways of generating revenue, property taxes and earned income taxes. Most cities use both. However, Beavercreek only uses property taxes, annually collecting a little more than $30.7 million.
The proposed 1% earned income tax would have annually generated more than $19 million for the city's general fund.
Monica Jones, Beavercreek's assistant city manager, said an income tax would enable the city to maintain public services without annually asking property owners to pay more. This is because the money levies bring in don't always keep up with rising costs.
"Our levies run in 5-year cycles before they need to potentially be renewed," said Jones. "However, our parks levy is in the seventh year which means that department is now in deficit spending. Thus, council may consider putting another parks levy before the voters."
Jones also said a streets levy will expire soon, setting the stage for Beavercreek city council to put a streets levy on the ballot next year. After that, she said voters will need to approve another police levy to keep that department operating in the black.
Meanwhile, Adams said using both income and property tax would have diversified the city's revenue, enabling it to do more long-range project planning.
"They complement each other by allowing us to have some sort of consistency so that we can make those plans for 10, 20, 30 years down the road what the city is going to be," Adams said.
This is the sixth time Beavercreek residents have rejected an earned income tax since 1984. With this latest failure, Adams said he's concerned about the city's future stability.
"People want to come here because we've got such great services and things like that. But my question is, who pays for those services? Who pays for your police? Who pays your streets to be kept up to date? Who pays for your parks? Who pays that?" Adams said. "The only way that the city can provide those services is by having dollars to pay to have that done."
Beaverceek is one of only three cities in Ohio with no earned income tax.
