North Canton officials: City needs 0.5% income tax hike due to dire finances

NORTH CANTON ‒ The number of emergency medical calls in the city has been rising about 10% a year since 2021.

With part-time firefighters leaving for other departments and full-time firefighters working more overtime and approaching burnout, the city's fire department took costly measures. It added six full-time firefighters, increased firefighter salaries by 4% to 6% a year, boosted starting salaries from $21 an hour to $24 an hour and is now paying $300,000 a year in overtime.

North Canton can pave only about a mile and a half of road a year due to exploding costs of asphalt and labor.

And the city's general-fund reserves have fallen from about $15 million when the Hoover Co. closed in 2008 to around $2 million.

These are among the reasons officials are asking voters to support a permanent 0.5% increase in the city's income tax rate to 2%. If approved on March 19, the tax hike would apply to all North Canton residents who work no matter the location and all non-residents who work in the city.

A person who earns $50,000 annually would pay another $250 a year. Income from Social Security, pensions and investments is not taxable by the city.

Mayor Stephan Wilder said Thursday that he and the city administration under a new administrator would fulfill all pledges made by former Administrator Pat DeOrio about how to spend additional tax revenue.

DeOrio, as of Wednesday, is no longer on the job. Wilder, who refused last week to describe DeOrio's employment status or the reasons behind the change, was to elaborate more at Monday night's City Council meeting.

"The reality is .... if you want to continue to receive the services that you've become accustomed to ... everybody needs to contribute that half of a percent," Wilder said in an interview last last month. "And asking for a half of a percent more where we haven't done anything (not increased the income tax rate) for 50 years is a small ask for everybody to contribute to the safety and well being and enhancement of our lives here in our city."

If approved, the tax hike would take effect Jan. 1. North Canton residents who work outside the city will keep a credit that covers up to 1.5% they pay in income taxes to other cities.

North Canton income tax rate

North Canton's income tax rate has been 1.5% since 1971. All other Stark County cities have rates of 2% or 2.5% with varying credit for taxes paid to other cities by their residents.

City officials say the hike would raise an additional $3.6 million a year. That would be offset by allowing the city's property tax road levy that generates $385,500 a year to expire this year. The net $3.3 million increase would help cover the gap where expenses exceed current revenue, now estimated at $1.5 million for 2024.

"It's just reached a point now where it's not sustainable," DeOrio said late last month.

The city had about 3,147 calls for ambulances in 2022 and about 3,500 calls last year. The city's large percentage of aging baby boomers is apparently driving the trend. The city's public policy analyst, Benjamin Younghas said many lost touch with their doctors during the pandemic and often called 911 when they felt sick.

In addition, to meet a backlog of required annual fire inspections for local businesses, the city increased the number of fire inspectors from one to three.

The roughly $2.64 million a year the fire and EMS levies raise are not enough to cover these expenses.

DeOrio said income tax revenue from the Meijer development is eventually expected to bring in an additional $180,000 a year in income taxes from about 300 employees; not enough to cover the budget gap.

In the city's spring 2024 newsletter, officials say about $1 million a year from the income tax increase would go to repay with interest at least $10 million in bonds that the city would sell to fund a new consolidated fire/EMS station on Viking and North Main Street.

The remaining $1.1 million per year would help pay for renovations to allow much of the police department now crammed into limited space in the City Hall basement to relocate to the main level of City Hall, estimated at a cost of less than $1 million.

The increased tax revenue would also also allow the city to pave at least five miles of road a year, "explore renovation options" for Dogwood Pool and "pursue further parks development."

Hoover Co. windfall about gone

City officials said as far as they can remember, the city's expenses have exceeded revenue nearly every year since the Hoover Co. plant was closed in 2008.

The city said it came out $1.3 million ahead from the sale of properties associated with the construction of the Meijer store on the former Kmart property. But the city chose to use the funds to purchase potential sites to attract new jobs.

DeOrio had said he would seek to build the new fire station even if voters reject the levy. DeOrio said North Canton risks a federal lawsuit if it doesn't have equal sleeping quarters for male and female firefighters and the city wants to significantly reduce its overtime costs.

"We have to build this. Now how do we pay for this? We propose that you pass this tax which will pay for this. Absent that, things will have to go away," DeOrio said. "I don't know where the money would come from to pave (additional) road."

Wilder said, "I'm not prepared to say that we have Plan B, C and D."

Reach Robert at robert.wang@cantonrep.com. X formerly Twitter: @rwangREP.

This article originally appeared on The Repository: North Canton officials: city needs income tax hike