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Sandusky to consider raising taxes

Andy Ouriel • Jul 22, 2014 at 9:27 AM

ouriel@sanduskyregister.com

Sandusky city commissioners could take action toward increasing both the income and admissions tax rates on Tuesday.

The elected officials plan to vote on this packaged tax proposal after discussing the pros and cons during a 6 p.m. special meeting inside City Hall, 222 Meigs St.

Watch tonight's meeting HERE live

Community members can attend the meeting and voice their opinions about this course of action.

Details about the plan, including numbers and figures, weren’t publicly available on Monday.

A week ago, Sandusky ex officio mayor Dennis Murray Jr. outlined the city’s bleak financial future, underscored by about a $500,000 shortfall in a $16 million everyday operating budget come March 2015. A proposed increase in expenses, mainly from union-approved raises and skyrocketing health insurance rates, created the projected shortfall.

Cuts are nothing new to Sandusky’s government. The constantly cash-strapped budget over the years has already resulted in deep staffing cuts, neglect toward road repairs and, more recently, frequent fire station closures.

Raising taxes, then, signifies a last resort for city officials to preserve and enhance local public services, such as police and fire operations, tree maintenance and road reconstruction.

“If we don’t make changes now, and restore our safety forces and invest in our infrastructure, then I don’t see how Sandusky pulls out of this dive,” Murray said Monday. “We are at ‘decision time’ in terms of what we are going to be able to do for our community.”

The proposed plan likely came together after negotiations and compromises between members of three key groups:

• Sandusky administrators and some city commissioners.

• Representatives from Cedar Fair, Cedar Point’s parent company.

• Representatives from Rebuild Sandusky, a grassroots organization previously campaigning to raise the admissions tax rate from 3 percent to 6 percent.

After all discussion takes place during Tuesday's meeting, commissioners are expected to vote on the proposal.

If a majority of commissioners on the seven-member panel vote to approve this measure, it will get placed on November’s ballot.

Furthermore, if a majority of registered city voters cast a “yes” vote in November, the tax rates would increase to an as-yet unspecified amount, effective Jan. 1, 2015.

A collective “no” vote from either commissioners on Tuesday or residents during November's election would effectively squash this proposal.

Possible tax collections

Based on 2013 tax numbers, here’s how much different Sandusky's total tax collection would look like: 

Admissions tax (currently 3 percent)

• 3 percent: $2.81 million*

• 4 percent: $3.74 million

• 5 percent: $4.68 million

• 6 percent: $5.62 million

• 7 percent: $6.55 million

• 8 percent: $7.49 million

Note: All figures rounded. The admissions tax is a 3 percent fee tacked onto ticket sales at Sandusky-based entertainment venues. It largely depends upon attendance at Cedar Point — the undisputed giant in the region’s entertainment industry.

Income tax (currently 1 percent)

• 1 percent: $6.7 million*

• 1.25 percent: $8.4 million

• 1.5 percent: $10.1 million

• 1.75 percent: $11.7 million

• 2 percent: $13.4 million

Note: All figures rounded. The income tax is a 1 percent fee taken out of paychecks for anyone that works within Sandusky city limits. The tax also impacts city residents working in other areas outside of Sandusky. The tax only applies to earned income, not, for instance, Social Security, dividends or other similar tax-exempt payments. This is the portion of income tax funding everyday operations.

* Represents current rate

Source: Sandusky finance department

At a glance: Possible tax increases

• Sandusky city commissioners are scheduled to vote Tuesday whether to raise the 1 percent income and 3 percent admissions tax rates.

• If a majority of commissioners on the seven-member board vote “yes” on Tuesday, the issue will get placed on November’s ballot.

• If a majority of registered city voters cast a “yes” vote in November, the tax rates would increase to an unspecified amount, effective Jan. 1, 2015.

• Details about the plan, including numbers and figures, weren’t publicly available on Monday.

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