Cleaves talks taxes with League of Women Voters

By Josh Ellerbrock -

LIMA — Lima Finance Director Steve Cleaves visited the League of Women Voters Tuesday night to present on how the many taxes that people pay gets funneled into the myriad services provided by government agencies.

Cleaves said he had received multiple questions concerning the topic prior to his presentation, and he worked to provide the answers Tuesday night.

To answer a question of how the city compares concerning administrative overhead, Cleaves explained that a pre-Recession report placed the City of Lima as the municipality with the third-lowest administrative costs out of the Ohio municipalities that had responded. Another question asked about the city’s income tax, and Cleaves pointed out that Lima hasn’t changed its 1.5% rate since the ’70s while many major metros have made an increase.

But while number comparisons are important, Cleaves clarified that most governmental budgets reflect what a city ultimately wants to do.

“The budget isn’t the numbers or the dollars, it’s the priority of the city,” Cleaves said.

A breakdown of the budget shows that the city’s No. 1 priority is safety services, which takes 66% of the city’s 2019 general fund. Following in second is the city’s public works department, which breaks down further primarily into parks, street repair, engineering and inspection services.

Cleaves also covered the city’s revenues. A few members of the crowd asked about property tax and where it fits into the equation, but as Cleaves explained, property tax is primarily what funds school districts and county departments. Rates differ depending on what levies voters have approved in their school districts.

In comparison, the City of Lima receives most of its funds, $18.7 million, from the city’s 1.5% income tax paid by businesses and individuals working in the city. The next highest revenue stream, or $7.7 million, comes from the city’s water contracts and district fees. Cleaves said when the relationships between the townships and the city were initially negotiated, the city offered to sell its water at a higher rate to deal with the loss of income if the surrounding townships maintained their own governance structures.

Attendees also briefly discussed where the Allen County Regional Transit Authority’s levy fits in the equation. The ACRTA levy would raise the sales tax by 0.1%, or add two cents in tax to every $20 purchase. The increase would bring the county’s tax rate to 6.85%, which still falls below the majority of other counties in Ohio.

By Josh Ellerbrock

Reach Josh Ellerbrock at 567-242-0398.

Reach Josh Ellerbrock at 567-242-0398.

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