Approves plan requiring all to pay 1 percent income tax

 

Ironton City Council gave its final approval to the proposal to repeal the city’s payroll tax reciprocity agreement at a special council meeting; first reading was given to an amended proposal setting the city’s municipal fee at the current $8 — not the proposed $10 and only for one year, with a review after that.

Neither proposal came without debate.

The vote to give final approval to repealing the city’s half percent reciprocity agreement was four in favor and three against. Council members Aaron Bollinger, Philip Heald, Mike Lutz and Kevin Waldo voted in favor of the repeal while Bob Cleary, Dave Frazer and Beth Rist voted against it.

Cleary noted that city resident Craig Harvey had a petition with the signatures of people who worked outside the city and opposed the repeal.

He said the people affected by the reciprocity, even though they have only paid a half percent of the city’s one percent payroll tax, still pay the municipal fee and the fire fee. Therefore they still pay for city services, contradicting a previous argument that these people get services without paying for them pay the full one percent tax.

“We already hit people working out of town paying the half percent. I know a lot of them work at the Town Center and they make barely above minimum wage,” Cleary said.

But Heald countered that reciprocity means “reciprocal.” In other words, reciprocity was put in place on the theory that equal numbers of, say, Ashland, Ky., residents and Ironton residents work in each other’s cities, Heald said.

“What would’ve worked as a wash in the past doesn’t work that way now,” Heald pointed out. “It may have worked before but I don’t think it works anymore.”

Initially, the municipal fee had been proposed to increase to $10 but Bollinger proposed the fee be amended to remain at its current $8.

“You know my viewpoint,” Bollinger said. “I feel the city of Ironton needs to cut. I will vote to keep the $8. But I won’t vote to increase it until we have cut as much as we can cut.”

Bollinger said he is not absolutely opposed to ever increasing the fee, and indicated under the right circumstances he might change his mind, but only after the budget has sustained needed cuts.

“What’s going to get cut are services and employees,” Lutz responded.

A motion to suspend the rules and give the $8 fee second and third readings failed, with Lutz and Waldo voting against the suspension and Bollinger, Cleary, Frazer, Heald and Rist voting in favor of it.

The most recent budget proposal included both a $10 municipal fee and the reciprocity repeal to close a budget gap that is anywhere from $125,000 to $500,000.

The reciprocity repeal is estimated to add close to $400,000 to city coffers. The $10 municipal fee would have brought in an additional $124,000.

Lutz said he did not know what proposal council will discuss next to make ends meet.

“It’s going to be interesting,” he said. “Reciprocity is going to get us close but it won’t seal the deal. We’re still going to be short.”