ATHENS, Ohio — Athens City Council approved the third and final reading of an ordinance to pursue a 15% income tax increase — but not before a lengthy discussion and significant public opposition.
The ordinance now will be sent to the Athens County Board of Elections to place the increase on the May 6, 2025 ballot. If passed, the increase will take effect in January 2026 and boost the the city’s general fund by an estimated $2.6 million per year.
The hike would raise the city’s income tax rate from 1.95% to 2.25%, which represents an increase of just over 15%. City officials have said the tax hike is necessary to keep up with the rising costs of medical insurance and medical claims for the city, and to keep up with pension costs for employees in the police and fire departments.
Council President Sam Crowl cast the lone “no” note in the 6-1 tally; councilman Michael Wood, 3rd Ward was absent.
Councilman Alan Swank, 4th Ward, noted an “interesting email” from a business owner on East State Street.
“We live in a town where maybe the majority of people, or at least the majority of income – is derived from people who work in the public sector – Ohio University, Athens City Schools, the city of Athens government,” Swank said. “And as such, those people are generally guaranteed an annual increase in their income. But many people, and I see a few in the audience tonight, work in the private sector. And they are not guaranteed an annual increase in their income.”
Swank noted that he worked for years in the yearbook industry, where metrics such as performance and accountability had to be demonstrated for raises to be considered. A lot of people “just don’t get an increase” after being stuck in the same job for years, Swank said, and so an income tax increase, and such a large one at that, amounts to a pay cut for them.
“Quite honestly, I don’t see the need, at this point in time, or at least the need for a .03% increase,” he said.
The city’s income tax, which makes up most of its general fund revenue, was expected to generate about $15.5 million in 2024, City Auditor Kathy Hecht said recently.
Hecht was absent from Monday’s meeting. Swank said the city’s income tax revenue to date is running $532,000 more than projected. At this rate, with December still to be calculated, the city is on pace to bring in over $581,000 more than was projected.
“We’re doing a real good job with our expenses,” Swank said. “In fact, we’re going to be reducing some of the appropriations this evening.”
Swank said general fund reserve carry-over is currently $4.8 million, “which is very much in line with the carry-over that we’ve had since 2020, which is very good.”
Swank said new businesses like Chipotle, Starbucks, the Lostro project and businesses located at the Armory — as well as the reopening of West Union Street — should boost the city’s income. Residents living in proposed housing projects on Pomeroy Road and Hooper Road, he noted, also would increase income tax revenue.
In addition, Swank said, a change in Ohio University that requires senior-level administrators to work on campus “could be a tremendous boost” at present income tax rates.
Councilwoman Solveig Spjeldnes, 1st Ward, said the city has lost about six businesses recently. She noted that personnel costs, including medical expenses, are a driver as to why nearly 80% of the general fund is spent on city employees.
Councilwoman Jessica Thomas, At-Large, said personnel costs are only going to increase, and that the city could need budget cuts by mid-2026 if the income tax increase doesn’t pass.
Thomas said if a wage earner makes $70,000 per year, the income tax increase would amount to an additional $210 annually.
Councilman Micah McCarey, At-Large, suggested scheduling public meetings on the proposed income tax increase so residents can learn about it. City Law Director Lisa Eliason said such meetings could take place once the ballot is set this spring, but noted that city funds cannot be spent on them.
Councilwoman Beth Clodfelter, At-Large, said a number of people have approached her about how such a large tax increase will affect their personal finances. “There is concern out there,” but the voters should decide, she added.
Council members heard a bit of that concern during the meeting.
Aaron Thomas, owner of A-Roc Entertainment and former owner of Class A Sound on East State Street for nearly 20 years, said the proposed income tax hike is going to hurt more than just the spending power of those working in the city.
Healthcare costs are going up not only for city employees but also for residents, Thomas said. He noted that his healthcare marketplace insurance costs $158 per month with deductible of $7,500.
Although a city income tax hike may cost a wage earner $120 in one earning category, recent levies for new school construction affect both wage earners and retirees, he said. Levies passed in the last five years have increased his property taxes by $1,400, Thomas said.
The city of Athens needs revenue to provide services, said Thomas, who sits on the city Board of Zoning Appeals. But the city also has to consider that the greater Athens area is one of the poorest regions in Ohio, with an average income under $40,000, he said.
Thomas fears he may have to consider leaving the area because keeping up with tax increases would mean raising his prices higher than people could afford.
“How much longer can we live in an area that’s becoming unaffordable?” Thomas asked.
Thomas said income tax proposals “prey on” OU students to pass them, students who won’t have to pay the income tax increase once passed.
By contrast, Swank said those who live outside of Athens but work in the city will be hit by a tax increase they won’t be able to vote on.
East Side resident Milena Miller said residents there have taken the brunt of tax base impacts like the closure of Echoing Meadows. A retired Federal Hocking teacher, Miller said it’s hard for her to consider voting “no” on school construction levies. But there are many seniors living on fixed incomes in Athens who are “hanging on by a fingernail,” she said.
Miller also said it’s “ludicrous” more checks and balances weren’t put in place to prevent $722,000 from being stolen from the city, after money was transferred into a fraudulent account that the city believed was held by the fire station contractor.
She also criticized the lack of safeguards that allowed former Athens Metropolitan Housing Authority Executive Director Jodi Rickard to steal millions from the agency.
Construction continues to devastate business
During the public comment period, the owner of an Uptown business told the council that losses due to construction on Union Street threaten the viability of her enterprise.
Saraquoia Bryant, who owns the Cool Digs Rock Shop at 13 W. Union St., said her business cannot withstand more prolonged sidewalk closures due to the $11 million Lostro building development.
That 24,000-square foot development, part of the state’s Transformational Mixed-Use Development Program, is constructing a boutique hotel, restaurants and a retail store in the former Follett’s Bookstore at 63 S. Court St. Lostro Ventures LLC and M&M Construction have received “sidewalk permit after sidewalk permit” from the city, she said, “and the permits keep coming.”
“They’re permitted to camp on the sidewalk, they’re permitted to obstruct the right-of-way to the decimation of people’s lives and livelihoods,” she said.
The Lostro Building project is receiving nearly $2 million in tax credits through the state’s historic preservation program and is expected to create 75 permanent jobs.
None of those jobs will be at Raising Cane’s, a fast-food chain that was supposed to occupy the ground floor. According to county officials, Bryant said, the company has pulled out of the Lostro project.
Bryant noted that a neighboring business, Grub and Go at 11 W. Union St., closed several months ago as a “direct result” of sidewalk closures for the construction. Jack Neal Floral, at 15 W. Union St., also is closing because the project has hurt its business so badly, she said.
Bryant showed slides of the work area that showed only a small section of the sidewalk completed. Other than Swank, Bryant said, city officials have avoided her and won’t answer her queries.
Bryant said to enter her Cool Digs shop, customers need to find parking somewhere near Union and Court Streets, and often have to “jaywalk” across Union Street to get to her store, which sells garden supplies, gems, crystals and fossils. She also owns a store at 596 E. State Street.
“All I want is my business not to be blocked and my commerce not to be interrupted,” Bryant said.
Bryant noted that her 10 employees pay city income tax and that her businesses produce sales tax revenue for Athens County.
“In the 13 years that I have collected sales tax in this town, I have collected more money than just got lost by this administration,” she said. “It’s real money. It’s real lives. We deserve real answers.”
Bryant said she wants a temporary walkway installed on the south side of Union Street.
Spjeldnes said other cities accommodate such predicaments with temporary walkways that resemble a cage. And even though such a walkway might be “inconvenient” to motorists on West Union Street, “it seems like it’s not unreasonable to ask – especially at Christmas,” Spjeldnes said.
Swank said the city’s service-safety office, however, has relayed that sidewalk closures may be necessary for another 60 to 80 days.
“Every month, the story changes,” Bryant said of the delays.
Swank said he received a letter from the contractor on Monday saying that it will “begin reviewing temporary access to Union Street” in the affected area and “when possible,” will provide access to sidewalks.
“That doesn’t sound too definitive to me,” Swank said. He also asked Bryant if she could withstand another 60 to 80 days of limited customer access to Cool Digs.
“You’re going to shut down my business,” she replied.
Bryant came before council in October to ask that Union Street be closed for Cool Digs’ annual gem show. At the time, she noted that only one of four events that closed the street during the year had been on the city’s list of approved street closures, and said that she had tried unsuccessfully to reach Deputy Service-Safety Director Andrew Chiki about a permit.
At Monday’s meeting, Crowl read a letter from Chiki stating that he did not act “unilaterally” to change or add to street closures while the city’s Designated Outdoor Refreshment Area was in effect. Chiki wrote that he was on medical leave in March and that DORA events are the purview of Service-Safety Director Andrew Stone.
Swank said that the ordinance creating the DORA authorizes the service safety director to “change requested dates or cancel events,” not add them. But two events that were not on the list the city approved in January took place, he said — one in June and one in July.
“Unless a DORA day on 5/17, 5/31, 6/28 or 7/12 was to 6/8 or 7/18, those dates were added, not changed, and therefore are not in the spirit of the ordinance that this council approved,” Swank said.
Bryant said in October that Chiki had told her, “Well, DORA’s over” when she reached him in September, even though her request did not include serving alcoholic beverages on the street.
Monday night, Bryant noted that DORA events help craft breweries in the city but don’t help small businesses such as hers. In fact, when a brewer sets up a booth in front of her business, it’s also an impediment to customers, she added.
ORCA ordinance passes; payment on hold
The city also passed an ordinance authorizing payment of just under $25,000 in dues to the Outdoor Recreation Council of Appalachia. The funds will come from the city’s hotel tax.
However, the ordinance stipulates that the city’s general fund reserve has to be at least 8% of total appropriations — and it doesn’t. That means the auditor cannot authorize the payment yet.
Councilman Jeffrey Risner, 2nd Ward, said the current general fund reserve is about 6.8 to 6.9%. Once it reaches 8%, the city can remit.
Patterson noted that one member of the council of governments — Athens County — was dropped as a voting member for non-payment of dues.
In other third and final ordinance readings, the council:
- Authorized a water line replacement on Factory Street, a new 10-inch line that will connect with larger water lines on West Union Street and one running through the OU Central Plant complex on the city’s south side. The city will expend $222,000 from its water maintenance fund for the project.
- Set membership in the city planning commission as: the mayor, the city service-safety director, two city residents, and one other public member, who can be from Athens County or a resident of a township adjacent to Athens County. Terms run for six years, and are appointed and/or re-appointed by the mayor.
- Set membership for the Athens Board of Zoning Appeals as five members appointed or re-appointed by the mayor, subject by confirmation by Athens City Council, for staggered three-year terms.
- Set membership of the Shade Tree Commission, with members appointed and re-appointed by the mayor, to three-year terms.
- Approved a contract agreement with American Federation of State, County and Municipal Employees Local 2403 through Oct. 5, 2027, which represents five city employees who are code enforcement employees. The 40-plus page contract includes pay increases based on years of service, with a first-year increase of $2.36 per hour; a second-year increase of 4.5%; and a third-year increase of 4.25%. The contract also spells out policies on items such as vacation time accumulation.
City prosecutor pay rate set
The finance and personnel committee, upon recommendation from city Law Director Lisa Eliason, introduced an ordinance that raises the assistant law director pay grade from $39.37 to $42.94 hourly; and raises the prosecutor position from $36.85 to $39.39 hourly.
Eliason said she hopes to hire a new prosecutor soon, once she can work out benefits with the prospective employee. The ordinance will be taken up later by the council.
In a related matter, the committee heard an ordinance that will transfer $65,000 from the unappropriated reserve to the DUI Fund.
Athens City Council’s next regular meeting will be at 7 p.m. on Monday, Dec. 23, in Athens City Hall, Council Chambers, third floor, 8 E. Washington St. Meetings are also available online. Regular sessions are on the first and third Mondays of the month; committee meetings are on the second and fourth Mondays.
This story was updated at 11:21 a.m. Dec. 19 to correct a misattributed quote. Alan Swank read the “interesting” letter and commented on it, not Sam Crowl. The Independent regrets the error.
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