Toledo Tax Proposals

Toledo Mayor Mike Bell last week said he decided not ask voters to increase the city’s income tax but will support a proposal giving it greater flexibility in how it spends part of the revenue.

Bell’s proposals are part of his 2010 spending plan, which needs to eliminate an accumulated $48 million general fund deficit.

To help balance the budget, Bell has proposed eliminating a tax credit for residents who work outside the city, as well as eliminating all pension contributions and cutting back health care contributions to union workers, among other recommendations.

“I think we all agree we don’t want to raise taxes. It’s not ideal,” Bell was quoted as telling the City Council.

At least one council member has said he would propose a sales tax increase instead of cutting the tax credit, an unpopular idea that was defeated last year by then-Mayor Carty Finkbeiner.

Stripping the tax credit would mean that Toledo residents who work in other areas would be required to pay two income taxes.

The council agreed to put a referendum on the May ballot that gives the city greater flexibility in how it spends part of the income tax — power that Bell said he would use to shift money from capital projects to cover operational costs, according to local reports.

Bell said he would not ask officials to take a 10% salary cut, and that he would spend $250,000 for a new state audit of the city’s finances to help address its long-term structural deficit.

The proposed hike would have increased the city’s income tax to 2.5% from 2.25% and would have generated $7.5 million in new revenue annually, according to local reports.

Eliminating the tax credit for Toledo residents who work outside the city would generate $8 million annually, the city said.

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