Gov. Bob Taft's proposed state budget for fiscal year 2006-07 would cut state income tax rates by 21 percent and reduce money for local government funds by as much as 20 percent in Athens.
In 2004, Athens city's local government fund -funding allocated from the state to help local governments operate -totaled about $800,000, said Kathy Hecht, Athens City Auditor. The proposed 21 percent income tax cut, which would be implemented during a five-year period, would lead to cuts for many government-funded departments, including equipment and computers for the Athens police and fire departments and salary cuts for multiple city offices, Hecht said.
The local government funds make up about 3 percent of the city's total budget of about $29 million.
Hecht said she thinks the tax reform corners Athens.
It's very difficult to make up for that loss of revenue
unless we enact an increase in the city income tax rate or cut city services Hecht said.
She said the cuts would affect Athens more than some other parts of the state because the presence of the university forces the city to rely heavily on local government funds. Athens receives a percentage of county property tax, but Ohio University, the largest area of growth in the city's economy, is tax-exempt.
Areas outside downtown Athens are already in a rough economic situation and the tax reform cut would only worsen it, Hecht said.
It puts an undue burden on the area in Southeastern Ohio she said.
The Ohio General Assembly has until June 30 to approve the budget, which includes Taft's tax reform proposal.
-Kevin J. Hogan
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Kevin J. Hogan
