Council reviewing fairness of income tax

Published 12:00 am Saturday, September 29, 2007

Ironton’s City Council is considering eliminating a municipal income tax for residents who work outside the city limits.

According to Ohio law, employees pay an income tax where they work, but if there is no income tax there, individuals pay an income tax where they live. Ironton has a 1 percent income tax in place for those who live and work within the city.

The city had a long-standing reciprocity agreement that meant that Ironton residents working in municipalities such as Ashland, Ky., who also have an income tax didn’t have to pay Ironton’s 1 percent since they were paying elsewhere.

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In 2004, the city council reduced the plan to 50 percent reciprocity meaning that people who work in another city and pay a municipal income tax there also have to pay a half-percent income tax in Ironton. This is in addition to the $8 per month municipal fee all all residents have to pay.

Councilman Richard Price has sponsored an ordinance saying that it amounted to double taxation to have to pay an Ironton income tax, another municipality’s income tax and a municipal fee. The measure got a first reading.

“I think it has been detrimental to the city at a time when we are looking at upscale housing going in on the old hospital property and other places,” Price said. “I just don’t think it’s fair to charge one class of citizens the higher fee to live in the city than another class.”

He said interim city finance director Kathy Elam was gathering figures on how much money the half percent brings into the city coffers.

Councilman Leo Johnson said he wanted to see numbers before he voted on the ordinance.

“If this passes, we would have to replace that money somehow or the alternative is we would have to cut jobs,” Johnson said. “I would love to do this, but I would hate to see (city) jobs cut.”

Price said he was for the half percent income tax before the municipal fee was passed.

“It has been something that bothered me since the municipal fee came into play. I just don’t think it’s fair,” he said.

He also added that eliminating the fee wouldn’t help him personally since he worked in Huntington, W.Va. where he has to pay a municipal fee and the reciprocity agreement doesn’t apply to that.