Council meets opposition to income tax

 

 The proposed new 1 percent income tax met some criticism and a possible petition of referendum from residents during Sherwood Village Council's meeting Wednesday May 12th.

Council held the second of three readings of an ordinance to enact a municipal income tax, which would go into effect July 1, if the legislation is passed by council. As proposed, any income earned after July 1 2004 would be taxed this year, but income earned before July 1 2004 would not be taxed.

While only a few residents were in attendance, they voiced their displeasure and that of others about the proposed income tax.

Judy Bayliss read a letter from Bill Weippert Jr. and Randy Luderman, two chiropractors who work in the village and were not able to attend the meeting.

"We are strongly not in agreement with the tax," the letter stated. "If you choose to burden us with another tax we will support a petition to have a referendum placed on the ballot to retract your 1 percent income tax, which you are imposing on us. As a matter of public record we are requesting a copy of your annual financial report at this time." Council was told a group was already forming to gather signatures for a referendum petition.

"If it happens it happens," said Sherwood village solicitor Steve Hubbard. "There is a formal process (for the referendum) and this is part of the democratic process. They (council) could have passed this as an emergency last month, instead they are doing it this way to hear your comments. If there are people out there opposed to it, it is part of the democratic process".

According to Hubbard, if a petition to appeal the tax ordinance goes forward, the county board of elections would have to validate the correct number of signatures. Once that is done the ordinance of imposing the tax would be put on hold until voters decide the issue during the next November general election.

Councilman Jim Hohenberger brought up the fact that Sherwood is one of the few municipalities that does not have an income tax.

Bayliss, who was speaking as a town resident but sits on the village board of public affairs, told council that she did not believe the tax was necessary. "I think council needs to buckle its belt," she said. "We have done that with the board of public affairs. There needs to be more information about how much this is going to make first."

Village Clerk-treasurer Dawn Buskirk said the village has trimmed expenses. "From 2002 to 2003 we cut $17,000," she said.

Councilman Mike Walker said many resident's don't realize how little real estate taxes the village receives and how necessary the tax is for the village.

"This tax is necessary to help with services, if you want to have anything beyond acceptable," he said. "We're not even at the acceptable point. We need some money. Maybe it would help the water bill and sewer bill. It's possible that money could be set aside to help with utilities or other items. There are any number of things that could be done."

Mayor G. Clay ton Miller stressed the importance of the income tax to the village." Our income has dropped dramatically," he said. "Income is not meeting expenses. I wish we didn't need the money, but we do."

Officials said money coming into the village from local taxes and the state has been declining over the years.

For example, according to records, in 2001 the village received $115,446.08 in local taxes and state monies for the general fund. The village was also planning on $25,000 in interest (based on 2000 figures), but only received $12,237.46. In 2003, the village received $102,074.40 in local taxes and state dollars for the general fund. It only received $2,322.76 in interest revenue.

Another resident asked a few questions regarding the tax, including who would pay and what would be taxed, while resident Kathy Snow questioned the tax, including if she had to pay it. "Our property is, as I understand, in the village limits, but we receive no services from the village," she said. "My question, is there a way we would not be taxed, because we do not receive the services even though we're in the village of Sherwood."

   Hohenberger told her that the taxes would work as follows: If an individual lives in Sherwood, but pays income tax to the municipality where he or she worked, then that individual would not have to pay taxes to Sherwood as long as that municipality's income tax was the same or higher than Sherwood's tax. Individuals who work and have earned income in the village will pay, too. However, some revenue will not be taxed, including Social Security, pension, military payments and others.

Snow also asked if it was possible to include a clause in the ordinance that sets an age limit for retirees and states that individuals a specific age and older would not be taxed on earned income.

Hohenberger said that issue had been discussed. Later in the meeting, . Walker made a motion that anyone older than 65 would have the first $10,000 in earned income tax exempt, and council passed the motion.

   Miller also asked about taxing lottery winnings in the village. Council decided to have Hubbard look at having the lottery winnings taxed. There will be an open meeting about the income tax before anything goes into effect, council said.