News: Tax Revolt

Norwood's future uncertain after residents reject large tax hike

Aug 11, 2004 at 2:06 pm
Matt Borgerding

With a $2.5 million deficit looming, Norwood could see some "frightening" changes, according to Mayor Thomas F. Williams.

The year was 1956 and the city of Norwood was at its peak. Its factories produced playing cards, Chevrolets, shoes, laundry machines and electric motors. The city's population doubled on the weekdays as residents of neighboring Cincinnati arrived to fulfill the factories' labor demands.

A suburb completely surrounded by the city of Cincinnati, Norwood had a bustling retail section known as the "Pike" and three movie theaters. On weekends the auditorium in the Norwood Municipal Building housed a Rock & Roll dance party called Teen Club.

"They started playing the music loud, and the next thing you know the Teen Club wasn't there anymore," says Tom Williams, a former member.

The closure of Teen Club didn't dampen Williams' love for Norwood. Fifty years later he still hangs out in the auditorium of the municipal building. Some things have changed though. Williams is now mayor of Norwood.

The dance floor where he once boogied to Little Richard is partitioned up into offices for himself, the city's law department and its safety services director. All that remains of Teen Club is a small red table tucked away in a corner of Williams' office, the names of partygoers scratched into the worn wood top.

The factories, movie theaters and weekday crowds are gone, too. The city's population has dropped from a high of 35,000 in 1950 to fewer than 25,000 today.

Norwood's future now lies in big-box retail. The city's biggest draw is the Rookwood Shopping Center, a large outdoor mall located about a mile from the "Pike." Other shopping areas are being built near Rookwood, to the chagrin of some residents who see the development as attracting crime and traffic.

Yet despite the difficulties, the "city that industry built" continues to plod along. Residents are proud of their independence from Cincinnati and enjoy living in a city where everyone knows everybody else, or at least one of their family members.

The family ties have created an insular community known for drawing people in, sending them out and brining them back. While sitting in the Daily Grind Café, a small corner coffee shop on the Pike, lifelong resident Mike Booher jokes that the city is a black hole.

"It's the curse of Norwood," he says. "You always come back."

A strong civic pride, however, has not translated into strong support for city spending. City officials begged residents to support an emergency 14-mill tax levy. In a special election last week, 85 percent voted no.

Fiscal Crisis
Like many cities and counties across the country, Norwood is facing budget problems. By the end of the year the city is projected to be $2.5 million in debt. The city's 2004 budget is $16 million.

Tax revenues haven't gone down; in fact, they're the highest in the city's history. But the cost of running the city has risen faster. Williams rattles off a list of rising expenses: gasoline, health insurance for employees, utilities, pension payments and salaries.

Some residents also blame former Mayor Joe Hochbein for exorbitant spending, a fact Williams touched on in his campaign last year.

Hochbein, mayor from 1996 to 2003, had a mixed legacy. He brought new development to Norwood and helped raise tax dollars. He also infamously spent thousands on a door in the mayor's office.

In 2000, Hochbein was charged with 14 counts of falsification, theft in office and unauthorized use of property. A judge acquitted Hochbein of all charges except unauthorized use of property, which he reduced to the charge of illegal use of a taxpayer identification number, a misdemeanor.

Whatever caused the fiscal problems, Williams says what's important is solving them. A declaration of fiscal emergency, which would bring state assistance and state budget control, might be the city's only option.

"We'll probably go to fiscal emergency," he says. "It will be rough going. There will be some changes. Some might be frightening, but we'll survive."

The 14-mill levy proposed by city council might have appeared high, but it was the minimum amount needed to keep the city functioning, Williams says.

Citizens for a Better Norwood led the charge against the levy. Carmen McKeehan, co-chair of the group, says residents voted no because they couldn't afford the tax hike. The owner of a $100,000 home would have faced $418 in additional property taxes.

There was also continued resentment by some residents against the developments Hochbein championed. McKeehan claims that, because of tax abatements, new developments such as Rookwood Exchange don't contribute money to the general fund.

"So in essence this money falls directly on the taxpayer and of course small businesses, rather than on large developments that are coming online," she says.

Walter Muse, general manager of the Daily Grind Café, believes Norwood should raises taxes on big businesses rather than on small businesses and homeowners. In an interview in his nearly empty store, he didn't have nice things to say about city council either.

"Some are pocket liners," Muse says. "The majority are there for their own personal interests."

Despite all his complaints, though, Muse admits he didn't vote on the levy.

Fancy doors, empty treasury
Williams is used to confused residents complaining about taxes.

"People don't want to pay taxes; and when you give them the opportunity, they are not really willing to tax themselves," he says.

On the question of who should pick up the tax bill — residents or businesses — Williams also has an answer. He points out that businesses bear the brunt of the city's taxation — up to 80 percent.

Timothy Molony, Norwood's treasurer, says developments such as Rookwood Exchange pay property taxes through tax incremental financing (TIF). In fact, he says, Rookwood is bringing in more revenue then expected. Under a TIF plan, a developer pays property taxes for the value of his land before development. Later, if the property is appraised at a higher value, the owner continues to pay taxes on the old value of the property, Molony says.

Both Williams and Molony claim the city loses money on most homeowners. To prove their point, they offer an example. A house in Norwood valued at $100,000 costs $1,500 a year in property taxes. From that amount, $210 goes to Norwood's general fund, $80 is used to pay Rumpke for trash removal and $130 is left to pay for city services such as police and fire protection.

Coming up with solutions for Norwood's financial problems is difficult. State auditors are analyzing the city's books and will release a report this week.

Many expenses, such as police and firefighter salaries, can't be cut in the short term because they are contractually obligated. Others, such as Hochbein's opulent purchases, can't be returned; the mayor's office has to have a door.

The city has halted all capital improvements and is looking to renegotiate contracts with its fire and police services. City council has proposed legislation to make other changes to the city. Some positions in the city's bureaucracy have been cut, others consolidated. Instead of a safety director and services director, there is now a safety and services director.

No matter what happens, the one thing Williams says he will not do is withhold basic city services to force residents to vote for a tax increase.

"You accomplish nothing by threatening people," he says.

On this point, residents appear to trust Williams. Neither McKeehan nor Muse is worried city services will be cut. After all, they surmise, Norwood has managed to survive previous fiscal emergencies. Why worry now?

"People here are afraid of change," says Booher. "They prefer the way things were in the '50s." ©