Beavercreek Council Advances Proposal for 1% Income Tax, Paired With 50% Property‑Tax Reductions

Beavercreek — The Beavercreek City Council advanced a proposal Wednesday to the next legislative step that would place a 1% municipal income tax before voters and eliminate identified property-tax levies representing roughly half of current city levy revenue.

City staff presented Ordinance 26-10, outlining a package that pairs a 1% income tax with a targeted 50% reduction in certain voted property-tax levies. Mr. Graham, who led the presentation, cited a Miami University model estimating that a 1% tax would generate about $19.6 million annually and said the change would reduce the city’s property-tax revenue by roughly $15.2 million. "In total we've got $232.95 of savings per $100,000 of appraised value," he said.

Why it matters: Council members framed the measure as a diversification of revenue away from heavy reliance on property taxes and as protection against a proposed statewide initiative that could further change property-tax law. Councilmember Bales said the plan "provides meaningful property tax relief for our homeowners" and argued the income tax would shift part of the cost of services to non-resident workers who use city infrastructure.

What council debated: The presentation addressed implementation timing, exemptions and credits, and distribution of revenue. Staff said the tax — if approved by voters and enacted — would take effect July 1, 2027, and that the city intends to offer a 100% credit for income taxes paid to another city up to 1%. Mr. Graham also said the city projects phased collections reaching about 60% in year one, 85% in year two and near full collection in year three due to administrative ramp-up.

Public comment and concerns: During the public hearing, Bob Trout questioned the way the ballot language would display millage figures and urged stronger charter protections that would require future increases above the baseline to go to voters. "Where did that document come from?" he asked of the draft ordinance's long text, noting the draft runs many pages and asking whether it came from the state or an external source. City staff and legal counsel said the ordinance language was drafted to comply with Ohio Revised Code requirements and that no artificial intelligence tool was used in drafting.

Next steps and vote: After discussion and multiple council members expressing support — and noting the need for public engagement and clearer voter information tools — Councilman Bales moved to place Ordinance 26-10 on second reading. The motion carried by voice vote. The second reading is scheduled for March 23, 2026, and council indicated the ordinance would be placed on the ballot if the council later adopts a resolution to do so.

Cost and fiscal outlook: Staff presented modelling showing an implementation-period budget gap (an estimated $3.5 million deficit during 2027–2029) and a smaller projected shortfall in 2030, acknowledging projections could vary. Staff also highlighted that roughly two-thirds of the projected income-tax revenue would come from non-residents, based on the modeling cited.

What remains unresolved: Council members asked for more public-facing materials, including an online calculator to help residents estimate their individual impacts. Legal counsel and staff clarified that state law (ORC Chapter 718) requires voter approval for any total municipal income tax above 1%, and that the ordinance's technical length is driven by required statutory definitions and exemptions.

The council did not adopt the tax at this meeting; the matter will return for a second reading on March 23.