Ironton residents and city officials met Tuesday in an open forum committee to hash out a plan for the city’s financial future.

Thursday, July 05, 2001

Ironton residents and city officials met Tuesday in an open forum committee to hash out a plan for the city’s financial future.

The group was organized after city council requested Mayor Bob Cleary to organize a committee composed of community members to determine the financial course for the city. This request came after council elected to impose a $2.50 per-month fee on city water users. The fee assessed on the water bill will only last until December 31, if city residents elect to add some way the city can generate revenue, or until March 31 of 2002. One focus of the group is to work out legislation that will be brought to the voters.

Ironton, according to officials, is facing a deficit in the budget due to several factors, including businesses closing shop and income taxes now being imposed by surrounding communities.

The loss of businesses in the city has had a direct impact on the city’s finances – less businesses, less employees paying Ironton’s 1-percent income tax. The loss in income tax equals about one-half million dollars in lost revenue yearly.

Another problem the city is facing is taxation imposed by surrounding communities.

If an Ironton resident works in Ironton, then the resident’s 1-percent income tax goes to the city. If an Ironton resident works in another city that does not charge an income tax, then the 1-percent income tax reverts back to Ironton.

But, if an Ironton resident works in another city that charges an income tax, the money goes to the city where the Ironton resident works. An exception to this would be if the tax the city where the Ironton resident works charges less than 1-percent, Ironton is paid the difference.

For example, an Ironton resident working in a city that only charges a 0.5-percent income tax, then the city where the Ironton resident is employed receives 0.5-percent and Ironton receives 0.5-percent.

Unfortunately, council chairman Jim Tordiff explained, more communities surrounding Ironton, such as Ashland and Russell, Ky., are imposing an income tax and Ironton is experiencing a shortfall of income. The specific amount Ironton is losing is one topic the committee has asked Cleary to clarify at the committees next meeting.

Increasing the amount of the municipal tax is one means to generate revenue the committee is considering.

Tordiff said according to Ohio law, an income tax above 1-percent requires a vote from the residents.

Increasing the income tax to 1.5-percent is a method being discussed at the meeting. A 1.5-percent increase will help generate the revenue the city has lost. And, according to statistics from the Ohio Municipal League, a 1.5-percent income tax would be aligned with what other cities with the relatively same population as Ironton is charging.

Census data shows Ironton having a population of 11,211 people. The city of Vandalia in Montgomery County has a population of 14,603 charges a 1.75-percent income tax.

Cities closer to Ironton also have a higher income tax than the city. Circleville, a city in Pickaway County has a population of 13,485, has a 1.5-percent income tax and Portsmouth in Scioto County charges a 1.4-percent income tax. Portsmouth’s population is 20,909 residents.

One of the problems associated with higher taxes, as pointed out by several committee members, including councilman Leo Ulery, is only working people would be charged, not people that are unemployed or retired. Ulery said "I’m retired, but I don’t care to pay my share." "Some people say ‘I’m retired, I’ve already paid my share,’" but, Ulery responded, these people live in the city and use the city’s services.

Another way to generate revenue is imposing a city-wide fee. A benefit, outlined a committee member, is that everyone in the city would be required to pay. Cleary pointed out one of the downfalls of the city-wide fee would be some people who could not afford to pay the fee would be required to do so anyway-putting some citizens in a financial crunch.

Another way the city can work within the budget shortfall is to reduce the services the city provides which will result in a reduction of employees.

The city has already done some stop-gap measures to save money. Employees that have quit or retired are not being replaced, keeping the money paid out in salary or wages in the city’s coffers. Tordiff said the mayor no longer has a labor pool to draw from. If an employee is off from work because of vacation or illness, then the mayor must temporarily transfer employees to other departments. Cleary said there has been times equipment operators have been transferred to the back of garbage trucks to pick up trash.

City employees have also pitched in to help bail out the city. Tordiff pointed out that city employees elected to not receive a percentage increase in their wages – even though the employees were entitled to the money – to help keep the city afloat.

Tordiff said city officials are also trying to educate the public about the dire financial straits the city could be facing. Tordiff said council and the mayor has been explaining the situation to people for some time. "We’ve been open, we haven’t hid anything…we’ve talked in the open…in front of the press."

The committee is scheduled to meet again July 13, at 5 p.m. to discuss possible recommendations after members have had time to review budget plans from the city finance office.