Looking earlier this year at a potential deficit of up to $8 million in the Newark city budget for 2026, officials sought ways to save money and increase revenue.
They gained some savings by not filling some open positions and by seeking grants and corporate donations to help cover the costs of some city projects.
And they agreed across the board – city council members, administrators and employees – that it was time to ask voters to consider increasing the income tax for the first time in 23 years, said Newark Mayor Jeff Hall.
Voters will see a request on the Nov. 4 ballot to approve a half-percent increase to 2.25% from the current 1.75%. Early voting begins on Oct. 7, and the last day to register to vote is Oct. 6.
“If you look down the list of the top 20 cities in Ohio, most have a 2.5% income tax,” he said. “We’re looking at 2.25%.”
And he noted that Newark residents who work in another city, such as Columbus, receive a 1% credit because their income is also being taxed in that city. The Newark tax is on earned income only – not on investments, he said.
The cost of police and fire services make up about half of the city budget, and the administration recently negotiated new contracts with raises for employees represented by the police and fire unions and is currently negotiating with the municipal employees’ union.
Of the 372 city employees, 81 are in the police department and 84 are in the fire department, for a total of 165, or 44% of the workforce.
“We try to do what’s right for the taxpayers and the employees,” said Newark Service Director David Rhodes, adding that the city faces an increased payroll cost of about $1.4 million in 2025 because of a 27th pay period that comes around every few years. In a typical year, employees are paid every two weeks for a total of 26 paychecks.
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Hall said in addition to maintaining wages that are competitive with neighboring communities so that Newark can retain good employees, the city of more than 51,000 residents faces the same increased costs as any household. The price of technology, utilities, construction materials, fuel and vehicles have all increased.
And the city faces some significant costs not faced by most families – such as buying fire trucks that cost well over $1 million each, plowing snow from the streets and mowing grass along them, maintaining 89 bridges, buying chemicals to treat drinking water, purchasing asphalt for 240 miles of streets and changing bulbs in 10,000 streetlights.
Another factor affecting city revenue is the change in the number and types of jobs available locally, and the wages they offer.
“Owens Corning used to have 3,600 employees and now has 800,” Hall said, referring to the Fiberglass factory just north of downtown. “And State Farm (insurance) once had 1,600 employees here.”
State legislative action also has had a negative effect on the city budget, Hall said, by reducing the amount of state tax dollars coming to Newark. That includes a reduction in Newark’s allocation from the state’s local government fund and elimination of the estate tax.
“It’s challenging when the legislature makes wins at our expense,” he said. “There is only so much we can do, but we’re very efficient.”
Rhodes said one way the city manages improvements is through the generosity of its residents, such as those who donated time and dollars to improve facilities managed by the Parks and Recreation Department, including development of the mountain bike trails at Horns Hill Park, construction of the skate park at Everett Park and the relatively new pickleball courts on Cherry Valley Road.
Read more: Thrill-seekers on two wheels transform Horns Hill Park into a renowned mountain-biking destination
In downtown Newark, where the city created a “special improvement district,” businesses agreed to tax themselves and pay extra for flowers and other amenities that beautify the area and draw in visitors and their dollars, Hall said.
And yet, said Council Member Doug Marmie, “We are spending more dollars than the income is producing – as far as tax income and other revenue sources.”
Marmie, who represents the 6th Ward and is chair of the finance committee, said the city’s total revenue in 2025 is expected to be about $44 million, and expenses are projected to be about $51.8 million.
“We had some cash carryover from last year,” he said, and that helped with this year’s budget, but next year will be a challenge.
If approved, the income-tax increase is expected to bring in about $8 million a year.
“We are at one of the lowest income tax percentages in the state,” Marmie said. “Even with a half-percent increase, we will still be below most others.”
If voters reject the income-tax increase, he said, significant budget cuts would be necessary, including to safety forces.
“I am one of the most conservative council members, and I don’t like raising taxes, but I see the need,” Marmie said. “And if voters don’t approve, we would have to cut safety forces, and I don’t like that.”
Rhodes said an Election Day loss could result in cutting as much as 15% from each department, and some departments are already running at reduced staffing levels to save money.
“The police department had four retirements, and the chief wanted to fill all four, and he was authorized for two,” Rhodes said.
Marmie said the council and administration have been working together, “constantly looking for ways to reduce expenses without hurting services. We do that on a daily, weekly, monthly basis.”
And he said there are virtually no other options for increasing fees to bring in more revenue. While the city receives a small amount of money from property taxes, he said it is not able to increase property taxes.
“The price of everything is increasing, and our tax income has not,” he said. “We have cut everywhere we possibly can.”
Alan Miller writes for TheReportingProject.org, the nonprofit news organization of Denison University’s Journalism program, which is supported by generous donations from readers. Sign up for The Reporting Project newsletter here.