By Angela Koenig
Enquirer contributor

MOUNT HEALTHY - City officials in this bedroom community of 7,491 say a proposed earnings tax increase would redistribute the tax burden to all income earners who reside here and help maintain city services.

Voters will decide on a 0.4 percent earnings tax increase on Nov. 5. The increase would apply to residents who earn income both inside and outside the city. If passed, the increase would generate about $400,000 annually.

Currently, the city has a 1.5 percent earnings tax, but also offers a 1.5 percent earnings tax credit to those who reside here but work in other communities.

"There's a big misconception that because they pay taxes to other cities that there is some kind of reciprocity, that we get a portion of that back, and we don't," said Safety Service Director Jim Koshmider.

If the measure were to pass, Mr. Koshmider said, all wage earners would contribute at least 0.4 percent of their earned income to Mount Healthy. As it stands now, people who work in the city, or pay no earnings tax outside the city, pay 1.5 percent to Mount Healthy. If a wage earner pays more to another community, whatever is offset by the 1.5 percent credit remains in that community. If a wage earner pays lower than 1.5 percent outside the city, the difference then gets paid to Mount Healthy.

The city, said Tax Commissioner Carol Litzinger, takes in about $1 million in earnings taxes annually, which is about one-fourth of the annual operating budget.

The additional funds, officials said, are needed to replace city equipment, such as police cars, road maintenance vehicles and emergency equipment for the fire department.

"The city has one police car with 106,000 miles on it, that's way overdue for replacement," said Mr. Koshmider, adding that two more of the city's six vehicles are in the 75,000-mile range and will also soon need replacing. The cost of a new car is $27,000, he said. There is also a need for a new dump truck, he said, which could run as high as $70,000.

"We've cut back on practically all operating costs; for example, we didn't even budget for dead tree removal this year."

What will soon make matters worse, said Mayor Ross Bittner, is the loss of inheritance taxes in 2005. At times, that income has generated up to $180,000 annually.

"It's a real unknown from year to year, but we do know now that it's scheduled to be eliminated completely," the mayor said.

Another factor that has hit the community hard are tax increases that have passed in other communities, such as Sharonville and Woodlawn, which took partial credit away from Mount Healthy, said the mayor.

"With our credit, that hits us hard.''

City Council does have the power to repeal the tax credit.

"But taking that away would be like giving everybody a tax increase without getting their permission, and council felt that the tax increase should be voted on," the mayor said.