Higher taxes for Cincinnati residents who work elsewhere?
CINCINNATI, OH (FOX19) -
Cincinnati's new budget proposal could raise taxes significantly for some residents, those who work outside the city.
City manager Milton Dohoney has proposed a budget that slashes $34 million in spending.
The idea is in one paragraph on page 65 of the 793 page proposal.
The city says it will generate $6.5 million of new revenue from some 15,000 residents.
"Most municipalities charge a tax between 1 and 1 1/2 percent of a person's income," says Fort Thomas accountant Dan Lindeman. "Cincinnati charges 2.1 percent but currently credits you for the amount you pay to the city or municipality where you work and that's what most cities and municipalities do."
According to the Cincinnati's own proposal, 90% of the municipalities in Southwest Ohio do not charge people who don't work in the city where they live. And of the ones who do, 83% give people some type of credit.
If Cincinnati decides not to do this, it would fall into the 10 percent of municipalities which don't provide any tax break at all for people in this situation.
Here's an example; Say you work in Blue Ash and make $50,000 a year. You would owe Blue Ash 1.5 percent of your income, or $750. Theoretically you would owe the city of Cincinnati 2.1 percent of your income, or $1,050. Currently, Cincinnati is going to give you a credit for the $750 you pay Blue Ash so if you subtract the $750 from $1,050, Cincinnati would get just $300. That's the break you're currently getting. Add that to the $750 you pay Blue Ash and you'd pay $1,050 total.
In the proposal for 2013, with the same example and the same numbers you'd still owe Blue Ash the $750 and you'd still owe Cincinnati the $1,050. However, Cincinnati's not going to give you any breaks so you'd owe both or $1,800. That would be $750 more you would pay in taxes in 2013 if the budget proposal becomes policy.
Some are not happy about this idea.
"If I'm going to spend an extra thousand dollars a year to live in the city maybe I don't have to go that far to another municipality where I don't have to pay that extra in taxes and I might still get some of the same benefits that Cincinnati gives me," said Adam Hopkins who lives in Over-the-Rhine. "I live in the city because I like all the things I can do. I can walk to eat, I can walk to restaurants, but I don't want to pay more in taxes to do that."
Hopkins also understands the city's budget problems. "I can see that they're trying to get money from everywhere. It just seems like this is a poor decision for them because the incentive is to move out of the city instead of to stay in the city."
A final vote of the budget could happen during a special session of council, scheduled for Dec. 14.