Euclid Voters Face Multiple Tax Votes in November

About 60 Euclid voters gathered to organize their opposition to two tax measures that will appear on the November ballot.

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In a bit of irony, two events held on the evening of August 29 highlighted the battle that will define the future of Euclid’s tax burden and financial future.  At the Briardale Greens Pavilion, over 60 residents opposed to new taxes gathered at a rally to kick off their efforts to stop two ballot initiatives being pushed by Mayor Kirsten Holzheimer-Gail and Euclid’s City Council.  Across town at the Help Foundation, the Mayor and Council President Charlene Mancuso hosted their fourth briefing for the public on why the tax measures were needed.

The topic of contention surround two initiatives that will appear on the November ballot for Euclid citizens.

New taxes to repair roads

The less complex issue will be a five year property tax levy that will be used “for the purpose of general construction, reconstruction, resurfacing and repair of streets, roads and bridges” according to the ballot language.  The tax increase will be for a rate of $0.20 for every $100 of property valuation.  For a home with a $100,000 value that translates to an additional $70 a year of taxes.  Complicating this equation is that the new property tax valuations recently received by homeowners will not be applied to this valuation.

“You have to maintain your buildings and your roads, but we don’t have the money to do so,” said Mancuso as part of a joint presentation.  The Mayor added that there are 143 miles of roads that the City of Euclid must maintain, there were 72 streets that were rated as being in the worst shape and in need of repair.  In 2016, the last major repair year for the City, 14 streets were repaired costing approximately $600,000.  This new tax would raise approximately $1,000,000 in revenue.

“This will give us the most revenue that affects the fewest amount of people,” added Mancuso.

Increased income tax revenues sought

Another ballot initiative involves a more complex issue with Euclid’s income tax.  Longtime residents remember that Euclid voters approved raising its income tax from 2% to 2.85% in 1994.  At the time, Euclid’s rate became the highest in the State of Ohio.  Today that distinction belongs to Bedford and Parma Heights at 3% with Euclid coming in third.  The average tax rate in Ohio is about 1.4%;  38 of 938 cities and villages have rates of 2.5% or above.  Most of the higher income tax communities tend to be in poorer communities.

Euclid’s unique tax increase in 1994 included a provision that provided Euclid City Schools with 0.425% of the 2.85 % collected.  This provision has since been ruled unconstitutional, preventing other cities from following Euclid’s lead.  However, Euclid tax provision is grandfathered in and allowed to remain.  This provision is not a part of the ballot initiative but worth mentioning when comparing Euclid’s income tax rate with other municipalities.

The City has always maintained 100% credit for local income tax paid to other cities.  This means if you work in a city other than Euclid, you get up to 100% credit for any taxes you pay to the city you work in.  So for example, someone working in Cleveland who in 2017 paid 2% in income tax to Cleveland, will pay an additional 0.85% to Euclid since Euclid provides full 100% credit of the 2% paid to Cleveland.  This credit percentage is what is being put up for a vote to change.

The ballot initiative will amend the City charter “to allow for City Council to adjust (change) the income tax credit from 100% to no lower than 50% by a majority vote of Council”.  In other words, voters are being asked to allow Council to change the credit for tax paid to other cities from 100% to anywhere between 100% down to 50%.  Once it changes, it can be changed again, either up or down, should council vote to change it

According to the Mayor and Council President, a big driver for this initiative is the recent change Cleveland made to its tax rate which went from a rate of 2% to 2.5%.  This means that anyone working in Cleveland who lives in Euclid now gets credit on their Euclid tax rate of 2.5% as opposed to the 2% they received just a year ago.  The loss of that 0.5% in taxes has cost Euclid approximately one million dollars.

“We know Euclid has a high tax rate at 2.85%.  This (ballot initiative) simply gives council the power to change the creit.  We don’t have to stay there,” said Mancuso.  She cited Eastlake as an example of a city that used the tax credit in times of crisis when they built Captain’s Stadium.  Mancuso said there is no guarantee that the tax credit would go down, and if it did it might only go down to 90%.  Council would need to go through a public process to evaluate the options and vote on the matter if the ballot initiative passed.

“We think this is a temporary thing.  It’s a tool that council can use to get us through a difficult time,” added Mancuso.  She added that Council looked at many different options to increase revenue and deal with a budget shortfall that has the Administration using rainy day funds to cover this year’s deficit. 

When asked why two tax issues were being put on the ballot at the same time, Mancuso stated that, “eight out of nine of us (council members) felt that we had to do both (tax initiatives).  There’s no revenue to pay the bills.”  This fall will also see Euclid City Schools putting a renewal levy on the ballot for Euclid voters to consider.  “It’s a perfect storm,” admitted Mancuso.

Fighting against more taxes

Surrounded by like-minded Euclid citizens, longtime political activist and Euclid homeowner Jeff Beck hosted a fundraiser to support his effort to fight the tax initiatives.  The gathering was supported by one current Euclid City Council member, Laura Gorshe, with several former council members in attendance.  “We claim that this city is overtaxed,” said Beck.  “Just because you raise taxes doesn’t mean you get more money.  You drive people out of the City.”

Beck said he attended other briefings offered by the Mayor and said people were quite vocal about their displeasure with the tax plans.  “They shut down questions,” he stated.  The first three meetings saw crowds of 40+ with the fourth meeting sparsely attended.  “They said they surveyed the residents, but if you talk to people here, nobody was asked how they felt,” added Beck.