Cleveland City Council Takes Up Possible Income Tax Increase

City Finance Director Sharon Dumas argues in favor of tax increase at city council. [photo: Matt Richmond / ideastream]

Cleveland Mayor Frank Jackson is proposing a one-half percentage point increase in the city’s income tax. The rate hasn’t gone up since 1981. The new rate would be two-point-five percent. He says it will put the city’s budget struggles – including layoffs and cuts to services – in the past. This week, city council began hearings on the issue.

The mayor’s office estimates the proposed tax hike will boost revenue by $80 million a year. Half would go to cover the city’s structural budget deficit. And $30 million would go toward improving services.

The city’s finance director, Sharon Dumas, says the city has struggled to close a budget deficit because of a drop in housing values, the repeal of the estate tax and a reduction in the amount of money Columbus sends to local governments.

“If in fact we were receiving the same amount from the State of Ohio that we had been receiving since 2008, we’d be 100 million dollars richer,” says Dumas.

The heads of several city departments presented their wish lists for the first budget if the new tax rate is approved. The housing department would seek to get a handle on Cleveland’s estimated 45,000 unregistered rental units. The Office on Aging says it needs administrative support.

Blaine Griffin, the director of the Community Relations Board, says he would hire more violence prevention specialists.

“And we are very interested in working closely with the hospitals as well as other entities in order to prevent retaliatory shootings from taking place,” says Griffin.

Later this week, the divisions of streets, police and fire will also present their wish lists. Council members seemed supportive of the increase, but questioned whether the money would be spent wisely. Members could vote as early as next week on whether to send the proposed increase to voters. 

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