Primer offered on tax proposal

FORT RECOVERY — Village residents had the opportunity Tuesday to ask questions about the proposed increase to income tax.

Fort Recovery administration and council members met at the Cooper Brothers Community Pavilion in Community Park to share details with the community about raising the income tax by 0.5 percentage points.

What would change?

Fort Recovery Village Council will vote on a third reading Monday whether to move forward with proposing an income tax levy and placing it on the ballot in November. If passed, the village’s income tax would increase to 1.5% from the current 1%.

As written into the proposed ordinance, the village will stop collecting on its existing four real estate tax levies if the income tax increase is approved.

The village’s real estate tax levies generate $294,583 annually. With the proposed income tax increase, the village could expect to gain anywhere from $500,000 to $750,000 annually, an estimated $200,000 to $450,000 increase from taxes collected currently.

If the village stops collecting on the real estate tax levies, village administrator Randy Diller estimated, residents would see a 14% decrease on property taxes for their homes. Those with non-owner occupied houses would see a 12% decrease, and commercial businesses and industries would see an 18.4% decrease.

Fort Recovery residents can calculate how much they would save on their property tax bills by searching their property tax information on auditor.mercercountyohio.gov.

(The real estate tax levies are listed on the tax distributions page under Fort Recovery Corporation as 2006 current expense, 2007 current expense, 2007 street improvement and 2009 storm water control.)

Diller explained Tuesday that village residents working in other communities already at a 1.5% income tax rate or folks who are retired will not pay more with the increased income tax rate. Those who live and work in Fort Recovery, work in Fort Recovery but live elsewhere or live in Fort Recovery and work in a community with a 1% income tax rate, however, would see an increase.

Why change?

The village has been collecting a 1% income tax since 1982. (Voter approval isn’t required for income tax rates at 1% or lower.) The current real estate tax levies have been on the books for more than 30 years.

A majority of surrounding communities collect at a 1.5% income tax or higher, according to Diller. 

On Tuesday, he talked about the real estate tax burden in Ohio.

“Everybody saw, at least myself and most of the people I talked to, saw at least a 20% increase in their taxes in the last couple years,” he said.

He said it can be a problem for those on a fixed income.

Diller also pointed to efforts at the state level to relieve the tax burden on residents. The income tax increase and elimination of the real estate taxes, he added, would shift the burden away from property owners and instead collect from those who have earned income in the village.

Upcoming projects

He noted various projects the village will be working on in the next several years. They include efforts to convert the 41-year-old water plant to a new treatment system and add in mechanical processes to the wastewater lagoons, with both projects estimated at $3 to $4 million. Also, Diller added, the village in general will keep up with infrastructure for streets and utilities, as well as opportunities for industrial and housing growth.

Fort Recovery has been awarded various grants for town improvements in the last few years, including $1.85 million for the town’s new water tower — it should begin operating by the end of the month —  and $450,000 from the state toward renovations at Ambassador Pool. (An assessment is being done this week on the pool to determine needs moving forward.) However, those grants don’t cover the whole cost — the water tower’s construction total price came in around $2.44 million.

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Diller explained the additional tax dollars would provide a more reliable income to help pay for future projects and village needs.

He said he has been suggesting the village look into increasing the income tax since 2007. At that time, though, Fort Recovery would have been one of the first communities in the area to increase their rate.

“It came up again this year, and it makes a lot of sense for the village moving forward,” he said.