The case for lowering taxes
As I write this column, we learn that American Greetings decided to build its new corporate headquarters in Westlake, taking nearly 2,000 jobs from its current location. Although American Greetings wanted an updated facility, the decision to move at this time came on the heels of an income tax increase in the city of Brooklyn from two percent to 2.5 percent. In this case the tax increase is partly responsible for Brooklyn’s loss.
I believe the same holds true for most other businesses, as well as many private individuals. Businesses looking to locate or relocate into a community assess many things, including the tax rate. It makes economic sense. Likewise, families interested in buying a house or re-locating to a community look at many things including the taxes they will pay. The high tax rate in the city of Euclid prevents companies such as American Greetings from moving here (Bluestone Park and easy freeway access would have been ideal for them). We have also lost many good taxpaying families to other communities for the same reason. Unfortunately higher income families with disposable income do not view Euclid as an option.
I sat through many long-term financial planning meetings the city has recently conducted. It is clear to me that Euclid is in serious financial straits. Our bond counsel stated that unless we find a new source of revenue we will be unable to borrow money by 2015. This means that any capital projects, such as Lakefront Development or even street repair, will cease. Our city services, such as leaf pickup, have eroded over the years. In 2011 there is no capital money to repave any streets in the city. Council enacted a garbage fee and a lighting fee upon all the residents in order to balance the budget in 2010 / 2011, and now the mayor wants to continue the garbage and lighting fees for four more years. The financial planning meetings I attended revolved on different ways to raise taxes on the citizens of this community. There was talk of decreasing the credit given for taxes paid to other cities, currently at 100 percent. The only immediate action being taken is to extend the garbage and lighting fees.
Personally I have had enough. I have been a homeowner in this city for over 30 years and have seen my taxes rise while city services have declined. Property taxes in the city of Euclid have risen 49 percent in the past 12 years (source Plain Dealer 1/19/11); this is the highest in Cuyahoga County. In March I presented a plan to city council to actually lower the taxes in this city. City council has not seriously debated this plan. Euclid is the only community in Ohio that shares income tax revenue with the schools. The schools portion (.47 percent) has amounted to nearly $60 million over the past 12 years. If we were to lower our income tax rate from 2.85 percent to 2.6 percent, and end the schools portion, the residents of this city would put $2.3 million back in their pocket and the city’s tax revenue would increase $2 million in 2011 (source 2011 city budget). Nearly 66 percent of a Euclid homeowners property taxes currently fund the schools while less than eight percent goes to the city (source www.cleveland.com/datacentral). I believe that strong neighborhoods and strong families build strong schools – not the other way around. In the past 15 years we have seen our schools deteriorate in test scores because we have seen our neighborhoods and families deteriorate. Euclid needs the money to rebuild the city’s infrastructure, attract more businesses and attract more tax-paying families. That’s why I have founded an issue-based committee – Responsible Euclid Citizens for Equitable Taxation (RECET). Our goal is to “reset” the income tax rate in Euclid from 2.85 percent to 2.6 percent. Soon, we will be gathering signatures to have this issue placed on the ballot this November and urge all registered Euclid voters to sign this petition. Our email address in firstname.lastname@example.org and our phone number is (216) 759-2840. I urge everyone to send an email or leave a message offering help or an opinion. I promised city council that any opinions would be made available to them so they can gauge community reaction. I will continue to write about this in upcoming issues of the Euclid Observer.
Euclid needs to lower the tax burden and use the monies for our infrastructure and basic city services. Lowering taxes will be the first step to attracting more business and tax-paying families. My hope is that the voters in this city agree and take that necessary first step in signing the petition. With enough community support we will all have the opportunity to vote for a lower tax burden this November.
Jeffrey A. Beck
I am a 32 year Euclid homeowner. I am involved in Weed and Seed, EDCOR, and am a Unit Commissioner with the Euclid BSA troops.