Mayor Larry Mulligan has proposed the tax increase, which received a first reading at Tuesday’s council meeting. If council approves, the measure would be on the Nov. 6 general election ballot. If approved by voters in November, the city’s income tax would be raised from 1.75 percent to 2 percent and would go into effect on Jan. 1, 2019.
For the second council meeting in a row, Mulligan urged council members to carefully consider the proposal, saying it would accelerate road and street repairs in the city with an additional $3.2 million annually, or $32 million over 10 years.
“Support of this legislation will allow for the voters of Middletown to provide direct input on the conditions of our streets,” Mulligan said. “Unlike legislation at the state and federal level, by voting for this legislation, we have the opportunity to allow the voters of Middletown to decide if roads are a priority for funding.”
City officials have said the city spends about $600,000 annually for street projects outside of state and federal grants.
Mulligan also said voters have approved income tax increases in the past for public safety spending.
He said with cuts to the state’s Local Government Fund and decreases in state and federal gas tax revenues, the city needs to have an additional revenue source for street and road repairs and maintenance.
“Other area cities levy taxes at 2 percent or more, or have a limited local credit for taxes paid elsewhere, which results in higher effective rates,” Mulligan said. “So if the voters approve an increase, we will not be different than our neighboring cities.”
Council’s two newest members are on record as saying they would not be in favor of such a tax increase.
During a candidate’s forum prior to the November 2017 general election, both Ami Vitori and Joe Mulligan said they would not support a tax increase to fund road fixes.
Vitori told the Journal-News that her position has not changed since the October forum.
“I keep my campaign promises,” she said.
While there could be a time and place down the road for such a tax increase, she said “now isn’t the right time.”
Joe Mulligan, the mayor’s brother, has not responded to requests for comment from the Journal-News.
Councilman Steve Bohannon said it is not the right time to ask voters for a tax increase, adding that residents will already see sewer rate increases for the next 10 to 15 years.
“I think it’s too much for Middletown,” he said.
Vice Mayor Talbott Moon said he is undecided on the proposed income tax increase.
Moon said he is concerned about how a tax increase affects the city’s ability to retain and attract residents and businesses when it already has the highest effective property tax rate in Butler County.
Instead, Moon said he would like to see the city return to dedicating a percentage of its current revenues to road and street repairs.
The city’s Charter Review Committee reviewed a proposal to mandate a portion of city income tax revenues be dedicated to capital improvements such as street and road maintenance. However, the committee did not recommend this proposal for a vote in November.
Council will hear a second reading on the proposed tax increase at its Aug. 7 meeting and would have to approve it as an emergency measure in order to place it on the November ballot.
Four of council’s five members must agree to placing the measure on the ballot, according to city officials.
The November ballot deadline is Aug. 8.
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