By Jennifer Edwards
and Liz Oakes
Enquirer staff writers

TERRACE PARK - With this small eastern Hamilton County suburb facing a budget shortfall, either the first tax increase in 10 years or cutbacks could be coming.

Terrace Park officials say they're not alone - the city of Wyoming on the west side, another relatively affluent Hamilton County suburb with a small business tax base - also faces financial worries that could lead to a tax increase.

Wyoming has put off replacing police cars and other purchases, and won't rule out a return to a higher income tax it lowered just three years ago.

Terrace Park residents can weigh in on their village's finances today during a 7:30 p.m.open forum at the community building, 428 Elm Ave.

Terrace Park, a community of 2,273 people bordering Clermont County, faced budget deficits in 1999, 2000 and 2003, village leaders say. These were offset by surpluses in other years.

Still, the 2003 shortfall concerns Terrace Park officials because they say it was caused by a decline in estate tax revenues that could soon be permanent.

The state is considering eliminating the estate tax, possibly as soon as next year, officials say.

Changes in Ohio tax law and village demographics have dramatically reduced Terrace Park's estate taxes, which as recently as 2001 represented 28 percent of village receipts, Porst said.

Terrace Park is one of three Hamilton County communities without an income or earnings tax. (The others are Glendale and Cleves.)

Wyoming officials aren't resting easy, either.

In 1998, the city raised its income tax to 0.7 percent, then decided to lower it in 2001 to 0.5 percent.

Since then, the general fund balance on Jan. 1 has plummeted by two-thirds from $3.6 million in 2001 to about $1.2 million this year.

A bright spot at the moment for the 8,261-population city has been the very issue worrying Terrace Park - estate taxes.

Wyoming has taken in $840,000 more in estate tax revenues than it budgeted for 2004, according to city figures.

But that income can't be counted on, warned Dina Minneci, Wyoming's finance director.

Wyoming, like Terrace Park, can't afford not to consider whether it should raise taxes, officials say.

"Things could be good now, but what about two, three, four years from now?" Minneci said.

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E-mail jedwards@enquirer.com and loakes@enquirer.com