By Michael D. Clark
The Cincinnati Enquirer

MONROE - City Council members favor putting a half-percent income tax increase on the fall ballot rather than increasing property taxes, according to the head of the council's Finance Committee.

City Councilman Richard Kremer said council members are warming to the idea of asking residents to help city leaders climb out of a financial hole by voting in November to raise the city's income tax.

"We're leaning toward the income tax option," Kremer said Monday evening at the second meeting of a recently formed citizens committee. The group was hastily put together in the wake of revelations that Monroe faces an estimated $1.2 million budget deficit in 2004, due in part to years of apparent financial mismanagement by two former city officials.

Without a tax increase, council members have warned residents that Monroe faces layoffs of city workers, cutbacks in services and a halt to capital improvements.

About a dozen volunteer residents combed the city's budget during the meeting looking for cost savings.

Kremer said any budget cuts for next year would not be decided by council until December, but that he expects council to vote next month on whether to ask voters to raise the city's income tax from 1 percent to 1.5 percent.

Also for the November ballot, council is considering a 4.84-mill property tax increase, which would cost the owner of a $150,000 home an additional $222 annually.

The deadline for fall ballot issues is Aug. 21.

Kremer, Mayor Mike Morris and acting Finance Director Jay Stewart stressed that the city of more than 8,000 is strategically located, halfway between Cincinnati and Dayton, for future commercial development that should eventually help relieve some residential tax burdens.

Stewart estimated that Monroe's finances could bounce back in "three to five years."

City officials have blamed financial mismanagement by two former Monroe officials, City Manager Donald Whitman and Finance Director David Collins.

E-mail mclark@enquirer.com