City Council approved a motion to support an increase in the community’s 1 percent income tax to 1.85 percent that will appear on the November ballot.
Council will meet again in special session to formalize the tax increase after further financial figures are provided.
The measure must be submitted to the County Board of Elections by Aug. 5 to appear on the November ballot.
The tax hike resolution was approved during a Committee-of-the-Whole meeting following Monday’s regular council meeting.
The city receives about $9 million a year from its 1 percent income tax.
Councilman Terry Keenan, R-1st Ward, who sits on council’s Utilities Committee, said it was imperative council roll the roughly $6 million relocated main fire station project into the tax hike as a means of selling it to the community.
During the 90-minute special session, council members weighed in on the merits of an income tax hike versus a property tax increase.
In the end, they decided to go for an income tax increase, while returning the same $8 million bond issue to widen Center Ridge and Lear-Nagle roads to the fall ballot that was rejected by a slim 145-vote margin in May.
That measure would have cost owners of a $100,000 home an additional $30.10 a year in property taxes to cover the city’s share of the $67 million cost of widening and improving both roads.
Councilman Dennis Boose, D-2nd Ward, said that the city shouldn’t put too many money issues before voters at one time “because my fear is that people would choose between them.”
Mayor David Gillock — who supported an income tax increase and returning the road widening bond issue before voters — pointed out the risks of waiting to put an income tax on the ballot until 2015.
“We’ll have three levies up for renewal next year,” Gillock said, including issues that fund the police, fire and streets departments.
“You don’t want to endanger those.”
The current 1 percent income tax gives residents who work outside the city a .10 percent tax credit.
That credit would be increased as part of the tax hike request, but a specific amount for the revised credit has yet to be determined.
None of the income tax increase funds will go to sewer improvements, Keenan said.
Council voted unanimously during its regular meeting to impose a 3 percent increase in sewer rates to take effect Aug. 1.
Council also voted, in the same piece of legislation, to boost a monthly base charge paid by all residential, commercial and industrial sewer customers from $1.82 to $9.
That significant hike will be offset somewhat by a permanent $2.50 reduction in monthly residential trash collection fees, as well as an additional two-year fee reduction of $5.
Revenue generated from both will be used for improvements to the city’s sanitary sewer system to reduce future back-ups into homes from flooding caused by increased inflow and infiltration into sanitary sewer lines.
Specific upgrades are to include relining sanitary sewers, purchase of a new sewer vacuum truck to clean the system, and upgrades to 14 of the city’s sub-basins, said Council President Kevin Corcoran, R-at large.
Corcoran said those upgrades could include widening and/or deepening the sub-basins as well as needed repairs.