BLANCHESTER — For the fifth time in four decades, Blanchester officials are asking voters to approve a 1 percent earnings tax to continue providing village services.
On ballots, the earnings tax will be labeled as an income tax. All members of council voted to place the tax on the ballot.
Blanchester Mayor John Carman said he believes the tax, if approved, will help the village attract business, continue providing its services to residents and avoid fiscal distress.
“We need this earnings tax in order to continue to provide our residents with 24/7 police coverage, improved infrastructure while providing a greater opportunity to draw new businesses to Blanchester,” Carman said in a written statement. “If we continue spending more than we take in, we will be broke in approximately four years.”
Reduced income, state aid
Carman said the economy, reduced state and federal aid and lowering property tax values and delinquent payments have put the village in a fiscal bind.
Property taxes in 2015 were still below where they were in 2008, state aid was cut about $150,000 — almost a 49 percent decrease — and the village’s earnings from investments have decreased as the village has had less cash to invest.
In 2013 and 2014, the village spent more than it raised in revenue. The 2013 deficit was $82,000 and in 2014 it grew to $121,000, despite a cut in expenses.
“Since 2008, we have seen our revenue decrease by nearly 49 percent,” Carman wrote. “If we continue to operate at a deficit, you can be assured Blanchester will find itself in the same position as the village of Clarksville is currently.”
State Auditor Dave Yost’s office recently declared Clarksville to be in a state of fiscal emergency.
Carman said an earnings tax would tax people who work in Blanchester without living there and, thus, don’t pay property taxes, and it would generate more revenue than a property tax.
A 1-mill property tax, Carman said, would generate $38,000. He said it’s “mere speculation” to estimate how much the earnings tax would generate, but said some estimates range from $250,000 to $350,000.
“A property tax levy would not be enough to eliminate our current projected budget deficit,” Carman wrote. “Nor would it offer any additional funds to improve the infrastructure, update equipment or provide additional police coverage, something we desperately need.”
Opposition to tax
Longtime Blanchester residents Jim Gregory and Fred Burchett are against the earnings tax.
Gregory, who said he’s protested previous earnings tax efforts, said the village doesn’t “deserve to get more money” because it has increased car tag fees (from $10 to $20, according to Carman), and Gregory said Blanchester Public Affairs has increased its rates on residents, making it difficult for residents to afford a tax.
“They’re taxing, taxing, taxing, and (residents’) salaries are not going up, they’re just hanging loose,” Gregory said. “You have to make cuts, and they’re just not making cuts.”
Carman also said the car tag fees don’t benefit the village’s general fund but its street department, which he said has used the money to secure a grant that will pay for work on Center Street and part of Main Street and has been used to resurface several streets, including North Broadway Street, Fairground Road and Watkins Road.
Burchett said he believes village council misspends the money it has now, and said a tax levy “wouldn’t fly” unless it definitely expired after five years and was only used for streets and sidewalks.
Carman said he believes the village has reduced operating costs without reducing village services, but warned that those services “will have to be cut if additional revenue is not found.”
Gregory also said the BPA, a separate government entity that administrates the village’s utilities, has recently increased its fees and accused it of overpaying employees that are paid with those increased fees. Those increased fees, he said, strain residents’ finances.
Jim Myers, assistant utilities director for the BPA, disputed Gregory’s use of the word “recent” in describing the fees. The latest fee increases levied by the BPA, he said, were in May 2014 for water, 2011 for electric and 2010 for sewer.
Gregory also asked why the BPA clerk should earn more than police, a claim the News Journal hasn’t been able to verify.
Myers said clerical staff at the BPA are paid on a scale that ranges from $9.84 to $19.99 per hour. He did not respond by press time to a follow-up email asking at which salary step the specific employee Gregory referenced is on. A BPA employee said Myers was out of the office until Monday. All public employees’ salaries are public record.
Blanchester Police Chief Scott Reinbolt said police officers are paid on a salary scale ranging from $16.30 to $19.84 an hour.
Burchett said it isn’t fair that registered voters in Blanchester will determine if those working in Blanchester have to pay more in taxes. Instead, he says the village should work to attract businesses, which will in turn increase tax revenues.
Carman said he agrees with residents who wish to see businesses attracted to Blanchester.
“However, in order to attract those businesses, we must have a strong and modern infrastructure, well-funded, basic municipal services, and a clean and polished appearance,” he said, adding that he highly regarded Blanchester. “But facts are facts. Take a drive down our Main Street, then do the same in Loveland. If you were a business owner, which community would you choose as the location for your new business?”
Carman said the bottom line is that without a tax increase, key village services, and employees, would have to be cut and the village would be less attractive to people and businesses.
“I believe people would be less likely to live or move in to Blanchester whether they’re a family or business, if we cannot provide a safe community with an active police presence,” Carman wrote. “We cannot continue to spend more than we take in. It would be tough, but I believe the elective body [council] will make the hard choice, even if it means cutting key services.”
“We want to let the residents decide the fate of our village,” Carman said. “All we are asking for is a chance. Give us five years to show our residents what we can do with this money.”
“I want to see them put in writing what they’re going to do with the money, guarantee it will be taken off in five years and not put on as a renewal,” Burchett said of the ballot issue. “That way it will give people in Blanchester here the opportunity to see if they’re telling the truth.”
Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.