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City makes push for income-tax increase
(by Sali McSherry - June 30, 2010)
City makes push for income-tax increase
By SALI McSHERRY
Absentee-ballot voting began June 30 in Pepper Pike for the special election Aug. 3 on a 0.5 percent municipal income-tax increase that would end after five years.
Currently, the city has a 1 percent income tax, with a 50 percent credit to residents who work outside the city. Based on an annual income of $75,000 for residents of Pepper Pike who work in any community with a 1.5 percent or more income-tax rate, the cost would be $62.50 per month, compared to the current $31.25 per month, according to Citizens for Pepper Pike campaign committee.
The second ballot issue is a charter amendment that strengthens the city's commitment to effective budgeting and forecasting, according to a letter sent to residents by Mayor Bruce H. Akers and City Council. The amendment would establish a new time line for the yearly budget process and require a financial report to citizens and a five-year financial forecast be done every year, according to city officials.
David Sheinbart, co-chairman of the levy campaign committee who also is head of the city's volunteer municipal emergency response corps, said his No. 1 one fear is that safety services would be cut back if the tax increase does not pass. People don't realize how vital emergency, fire and police services are until they need them, he said.
City rank-and-file employees, all but the police, have experienced a total 25 percent pay reduction, in the form of furloughs and pay cuts. By Sept. 1, if the levy passes, their salaries prior to the March 1 pay cut could be reinstated, Mr. Akers said. But whether employees will regain the money in the future from this time of pay reduction is an open question, council members said.
Mr. Sheinbart's co-chairs are Jean Seaton and David DeWolf, who have been active volunteers in the community. Last weekend the committee circulated fliers to all households and put "Preserve Pepper Pike" signs up. They also have hosted focus groups and coffees to explain the proposal.
The tax automatically will end in five years, holding city government accountable, according to the committee. Only earned income would be taxed. Unemployed residents and retirees without earned income will not pay and Social Security, pensions, unemployment benefits, dividends, inheritances, capital gains, annuities and interest would not be taxed, they said.
For almost 40 years, the income-tax rate in Pepper Pike has been at 1 percent, one of five communities in Cuyahoga County with the lowest tax rate among the 57 municipalities that charge income tax. If the proposed income tax is approved, the city's tax rate would remain in the lowest third of all communities in the county.
A 0.5 percent increase would generate about $2.2 million a year, about $1 million less than a 0.75 percent increase council had considered. After weighing the tax increase issue, council agreed that revenue projections by the finance department were too conservative.
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