Wednesday, August 07, 2002

Bond-rich Reading to seek tax increase




By Susan Vela, svela@enquirer.com
The Cincinnati Enquirer

        READING — The city will be able to cash in $4 million in bonds next year, but the expected windfall isn't stopping council from asking voters to more than double the city property taxes they pay in 2003, 2004 and 2005.

        Council members have decided to place a three-year, 3.75-mill levy on the November ballot that would generate about $600,000 a year for the city's general operating fund.

        The city already levies 3.5 mills for all homeowners, which goes toward the general fund and capital improvements.

        The proposed increase would require the owner of a $100,000 home to pay $131 more than the $123 he pays now.

        City officials said the tax increase is crucial to finance 3 to 4 percent pay increases, plus respectable retirement and benefits packages, for the city's 75 employees. Next year, these items will eat up the bulk of the city's $4.5 million spending plan, Safety-Service Director Timothy Hoerst said.

        If voters don't give a resounding “OK,” he said elected officials may have to charge for garbage collection and other city services.

        An earnings tax generates about $4 million a year for the city but hasn't been enough to keep up with the times.

        “We're running pretty lean,” Mr. Hoerst said. But, “how do we ask our residents for an increase in taxes at the same time that we receive $4 million in bonds?”

        The bonds were purchased after the city sold the former electric plant about 30 years ago. City officials originally wanted to accrue money for future capital improvements.

        While they could cash the bonds early next year, council members voted 4-2 last month to go to the voters with a tax proposal rather than use the bonds to take care of their budget problems.

        Mayor Earl Schmidt, who does not support the proposal, said city officials could have set aside at least some bond revenues without bothering voters. Now, he said, it's going to look like they didn't know how to solve their financial problems and instead asked the voters to handle them.

       



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