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Present at the Monday, March 6, regular Village Council meeting were Council members Marianne Macqueen, Gavin DeVore Leonard, Carmen Brown, Vice President Kevin Stokes, President Brian Housh and Village Manager Josué Salmerón. At the top of the group's priorities for the meeting was a discussion on lowering the credit rate on income tax granted to other municipalities.
Village Council weighs income tax changes
- Published: March 13, 2023
Village residents who work outside of town may soon have to pay more in local income taxes.
At their regular meeting on Monday, March 6, Village Council members weighed the impacts of a proposed ordinance that would lower by half the amount of income tax credit granted to individuals who work beyond Yellow Springs and pay taxes in other municipalities, from 100% to 50%. The Village’s current 1.5% income tax rate would remain intact.
In other words, under this legislation, those who pay income tax to another municipality would also pay .75% in income tax to the Village.
By the math, those who earn an annual $10,000 outside of the Village would pay $75 in additional Yellow Springs taxes each year; $25,000 earners would pay $188; $50,000 earners would pay $375; $75,000 earners would pay $563; and $100,000 earners would pay $750.
Although Council members reviewed this legislation at Monday’s meeting, the group will give the proposed ordinance a second reading and public hearing at their next meeting on Monday, March 20. Should it pass into law, it will take effect immediately and retroactively impact income taxes paid since the beginning of the 2023 calendar year.
“It’s important to keep in mind that we’re not increasing income tax,” Council President Brian Housh said, recognizing that such a move would require a ballot measure. “We’re simply asking those who live in the village and work out of town — those who enjoy the many services in Yellow Springs that we want to continue to offer — to pay their fair share.”
According to Housh, the ordinance was born out of a need to generate more Village revenue to work against the projected $3 million deficit for 2023.
“We definitely wouldn’t have this on our table unless we needed to do it,” he said.
As outlined in a memo sent to Village Council members before the meeting, by lowering the amount of credit offered to those who pay income taxes to other municipalities, the Village is expected to generate an additional $240,673 annually. That money, the memo states, will not only help to balance the Village’s budget, but also to offset the costs for infrastructure improvements, operating the public pool, financing public safety needs and other “unfunded or underfunded” activities.
The memo also includes 2018 census data to note that the proposed rate change would affect approximately 1,116 village residents who are employed outside of Yellow Springs. Of those residents, nearly 50% earn around $40,000 per year or more. Twenty-four percent of village residents who work outside of town earn $15,000 or less. Only 399 village residents are employed in Yellow Springs.
Should this ordinance be voted into law, Yellow Springs would be among 213 Ohio municipalities that rely on the Regional Income Tax Agency, or RITA, that offer partial or no credit for income tax paid to another municipality. The other 209 RITA members offer 100% credit.
“[This proposal] has been a long conversation spanning multiple years,” Village Manager Josué Salmerón said. “Based on our information and the conversations [we’ve had] with RITA and other municipalities, a 50% credit adjustment seems reasonable. So, that’s what we’re recommending.”
While Council member Gavin DeVore Leonard recognized the Village’s need for additional revenue, he said he was reluctant to foist more costs on villagers. Citing mounting financial pressures individual households face, from inflation to the looming possibility of a new Yellow Springs school levy, DeVore Leonard stated he was inclined to vote “no” on the legislation.
“People think of us as a rich community — and there are rich people here — but statistically, 70% of [village households] make under $100,000,” DeVore Leonard said. “If we could pass a progressive form of taxation where the wealthier people paid more, I’d do that in a heartbeat.”
Council member Marianne Macqueen said she supported the proposed ordinance.
“It’s reasonable that if you live in the village, you should contribute through this tax — which I believe is pretty minimal,” she said.
Additional coverage of the Monday, March 6, Village Council meeting will appear in next week’s issue of the News.
One Response to “Village Council weighs income tax changes”
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After reading this my wife and I are sorry we recently bought a house in Yellow Springs. It seems as though leadership is constantly trying to beef up the coffers by nickel and diming the residents at every opportunity, even when it’s “pretty minimal.” We are now seriously considering looking for property just outside of YS. Fiscal responsibility would suggest the village look at ways to cut costs before reaching into our pockets. I’m not seeing any real effort to reduce expenditures, just increase the revenue stream.