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City of Toledo pushes for income tax increase to repair roads

Mayor Paula Hicks-Hudson says the city's priority is to fix residential streets first and is asking for a one percent temporary income tax to do it. Currently, the city's income tax is three-fourths of a percent.

TOLEDO, OH (WTOL) - City leaders continue to look for ways to fix Toledo streets. Their newest option: an additional temporary income tax increase.

Mayor Paula Hicks-Hudson says the city's priority is to fix residential streets first and is asking for a temporary income tax to do it. Currently, the city has a permanent 1.5 percent tax, as well as a renewable income tax 0.75 percent, making the current income tax 2.25 percent. The potential increase would raise the total income tax to 2.5 percent.

The Toledo City Council would have to approve the ordinance by Dec. 15 to be put on the March ballot.

City Finance Director George Sarantou says the city has been pushed to this point after a loss in state funds.

"[In] 2008, we received $24 million (from the state). This year, we will receive essentially $8 million," Sarantou said. "That's a $16 million cut. You add up those cuts (over the years), it's $83 million."

He says in order to fund the police and fire departments, the city has had to pull money from the Capital Improvement Fund, which is used to fix the roads.

Mayor Hicks-Hudson says she looked at all options to get the funds to fix roads.

If the tax increase passes, it would allocate millions of dollars starting in July 2016 specifically for residential road repair throughout the city.

"It's important that we do that, because (residential roads) are the roads that have not been able to have any work done for the past four years," said Mayor Hicks-Hudson. "We're talking about really fixing the roads, not doing a cosmetic kind of attack on roads, but really fixing them so they will last the time that they need to last."

For someone with a $35,000 income, the increase would amount to an additional $7.29 a month.

"The final decision (that she made) is how it impacted the actual taxpayer. When you think about $7.29 a month for $35,000 income, which is about the median income for the citizens of Toledo, it's almost negligible. I know that there are some folks who may be seeing this as more of a difficulty for them because their income is lower, but when you look across the board and see what we have to do, this is something that we felt was most equal for everyone," Hicks-Hudson said.

The mayor says fixing the streets was one of the top questions she heard from voters while on the campaign trail.

"We heard them loud and clear, but we wanted to make sure that we had a mechanism in place that will give us the dollars that we need and not negatively impact the taxpayers," she said.

Toledo City Councilman Larry Sykes also showed his support for the ordinance Tuesday morning.

"I think in the past [the streets have] been neglected. I think the mayor is taking a bold initiative," he said. "I would hope that they (the voters) would turn out. We're asking for a temporary (tax), it's not like a 10-year or 20-year, and I think it's fair. You shouldn't put on an extended or permanent tax on anything. Looking at this, I think they'd be very supportive with the understanding that it's going towards the streets. Let's be honest, our streets are horrible."

But Councilman Rob Ludeman says some members of council have a problem with the way the proposal is worded. The renewable 0.75 percent tax is already headed to the ballot, but the proposal has it as a 1 percent tax increase due to the added 0.25 percent.

Ludeman says the two taxes should be separated. He's sponsoring an amendment to make sure the new tax would only be used for roads, without diversions.

"Separate the two so in March they could vote on the three-quarter percent renewal, and they can vote on a one-quarter percent new tax," he said. "I think that would keep it fair and above board, and it would be less confusing to the voters and we would get our roads repaired."

Members of the administration will give a presentation to a city council committee on the proposed hike on Friday, Dec. 11 at 1 p.m. Residents will be able to ask questions at the public hearing.