Eviston reported the assessed valuation of city property taxes is $1.4 billion dollars. This marks the second time the valuation has topped the billion-dollar mark. Last year was the first time the city achieved that record-setting number.
In total, Eviston told commissioners the general fund — including personal income tax, sales and use taxes and corporation taxes — is projected to be $58,383,282 as compared to last year’s figure of $57,338,220. That’s a 1.8% increase.
She cautioned the city is increasingly reliant on income taxes for funding. That now accounts for 82% of city revenues, which have not grown for Springfield at the same rate as statewide.
“When we look at annual wage growth across Ohio for 2023, it was 3.1%. Income tax for the city was only up 1.3% at the end of 2023 … We’re currently up 2.7%, so we continue to see that as flat because the number of net new jobs remains stagnant,” she said.
The city is also continuing to experience economic challenges related to remote work left over from the COVID era and state legislation surrounding it, she said.
“One thing I do want to highlight when it comes to income tax is that population growth does not equal income tax revenue growth,” she said. “Job growth and additional housing equals income tax growth. So we’ve had some losses, but with the development underway, we have some great things in the pipeline currently. But it takes awhile to realize that growth in revenue.”
Credit: HUE12, LLC
Credit: HUE12, LLC
State actions to reduce the local revenue fund have also had an adverse impact on local government budgets, Eviston told officials.
While the state budget is carrying a surplus, it has continued to rein in state funding to local government entities. She cited the state’s actions related to the Local Government Fund.
“At its highest, combined with the estate tax, that number was previously over $5 million. House Bill 1 from the 2024-2025 state operating budget, that percentage was increased from 1.6% to 1.7% in the state budget,” she said. “As you’ll recall, in 2012 the state cut that in half to balance the state budget.”
Even with the increase from 1.6 to 1.7% included in the new budget, additional tax cuts at the state level decrease the amount of money available for local municipalities, she said.
“So the number we are showing for the coming year is a 22% decrease from 2024 … this year we’re expected to receive $2.5 million. That number drops to close to $2 million next year,” Eviston said. “That’s driving up the city’s reliance on income tax.”
Assistant Mayor David Estrop thanked Eviston for pointing out the impact state actions are having on local government.
“To put this in simple terms, the state of Ohio balances its budget on the backs of local government, in part, as well as schools,” Estrop said. “The state, interestingly now, has a surplus of money. Are those funds coming back to schools and cities? You just heard. Minimally.”
Estrop thanked the voters of the city for stepping up.
“Had it not been for the voters of our city who approved two levies, this city would be near or in bankruptcy … The reductions in state spending have had a tremendous impact on this community and others, who’ve had to step up and plug the gaps created by lack of state funding with local dollars.”
Since 2017, Springfield voters have consistently approved tax levies to help fund emergency services, street and permanent improvements.
The city is required to submit projected revenues for state review in July as the first step of the budget process. Public meetings and a public vote by city commissioners will be required before the budget is finalized in December.
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