LEETONIA — Voters will be presented with a proposed 0.5% increase in village income tax for safety forces and general fund in the upcoming Primary Election May 5.

Currently Leetonia collects income tax at a rate of 1.5% and collects approximately $1.1 million annually. If the proposed increase is approved by voters, that rate would increase to 2%, which Fiscal Officer Nick Mistovich estimated would net the village an additional $400,000 annually.

The village has promised that if voters approve the income tax increase, which village officials have said is intended to reduce the village’s reliance on property taxes amid ongoing efforts to reduce or abolish property tax in the state, Leetonia will not collect property taxes from residents.

Mistovich explained that approximately 11% of the property tax paid by residents annually goes into Leetonia’s coffers, equating to approximately $140,000 in property tax revenue per year while the rest goes to the county and state, meaning that residents would see a corresponding 11% decrease in their property tax bill if the village stops collecting those funds.

“Within the state of Ohio there’s a lot of talk about doing away with property tax, and uncertainty about what they’re going to do. They could take $140,000 away from us if they just get rid of it, and to my understanding there’s no plan to fund villages if they do. So, the thought was to try to get the income tax and move away from the property tax ourselves,” said Mistovich.

Mistovich said that on average, village residents make roughly $50,000 annually, meaning that if the additional 0.5% were approved, those residents would see an approximately $250 increase in their income tax bill over the course of the year. Mistovich also said that the average property tax bill for Leetonia residents is approximately $1,800, and that an 11% decrease in collections would decrease that figure by approximately $200, for an actual net increase of only $50 for most residents.

Mistovich argues that for many residents approving the income tax would be a pure savings for many residents, as the average age in Leetonia is 68 years old. He explained that as the income tax is only collected on earned wages, residents who are retired or on social security and therefore don’t pay income tax would just benefit from the reduction in property tax. He also said that 35% of the village’s property tax is paid by large businesses in the area rather than residents, meaning that in addition to helping the village’s finances, approving the income tax would help to shift tax burdens away from residents.

“If your real estate is going down by around $200, your actual out of pocket is only about $50 more. That way if you’re not working, it’s just a net benefit, and if you are working, your property tax would still go down so it wouldn’t be as big of an increased expense,” said Mistovich.

Mistovich said that if the income tax increase was approved, approximately 35% to 50% of the revenue it collected would go to the village’s general fund while the remaining balance (50% to 65%) would go to safety forces. He explained that it was difficult to give an exact percentage split at this time because the police department is currently funded directly through the village’s general fund and does not have its own separate fund like the fire department.

“What’s happening is the police are part of the general fund. We would split them out and create their own separate fund and a lot of that [revenue] would go to creating that fund and then to the fire department,” said Mistovich.

Mistovich said that until police funding was unentangled from the general fund and it was clear what expenses would be paid from the new Police Fund and which remained with the general fund, he couldn’t calculate an exact revenue split.

Mistovich said that if voters do not approve the income tax increase that the plan would be to continue business as usual for the time being, meaning continuing to collect existing income and property tax at their current rates.

He said that currently “from a revenue standpoint there really is no alternative” to increase revenue and reduce reliance upon property taxes if voters will not approve an income tax increase and that in the event the village did face a significant loss of property tax revenue that hard cuts would have to be made.

“If push came to shove and the state cut our property taxes, we’d have to look at laying some people off and making cuts wherever we could,” said Mistovich.