Council Briefing | Income Tax Credit Reform
Avon Lake residents choose this community for its quality of life, its safety, and its services. Those things have to be supported. This page explains how the current tax credit structure works, who it affects, what the revenue would fund, and what a credit reduction means for you.
Section 1 | Who We Are
Avon Lake is a high-income, highly educated, predominantly residential city. Its residents earn well, commute to professional jobs across the region, and return home to a community they value. That reality did not happen by choice. It is the result of decades of development decisions that prioritized housing without a broader vision for long-term financial sustainability. Understanding where we are is the starting point for any honest conversation about where we go from here.
How Avon Lake Compares to Neighboring Communities
| City | Population | Median HHI | Tax Rate | Credit Rate | Key Characteristics |
|---|---|---|---|---|---|
| Avon Lake | 25,752 | $115,567 | 1.50% | 1.50% | Predominantly residential, lakefront. Industrial base (Ford, Avient, Lubrizol). Limited commercial land. 75% of wage earners commute out. Most generous credit of any comparable community in this table. |
| Westlake | 34,232 | $112,200 | 1.50% | 1.50% | Major retail corridor (Crocker Park). St. John Westshore Hospital (UH system) plus satellite offices and outpatient facilities. Multiple industrial properties and parkways. Significantly larger commercial tax base drawing workers in daily. |
| Avon | 25,317 | $135,915 | 1.95%* | 1.70% | Rapidly growing. Cleveland Clinic Richard E. Jacobs Campus (expanding, second hospital planned) plus UH cancer facility and satellite offices. Major retail corridor. Rate and credit both increased by voter approval (Issue 3, May 2025), effective 1/1/2026. |
| Bay Village | 15,984 | $132,254 | 1.50% | 1.00% | Predominantly residential, very limited commercial. Structurally most similar to Avon Lake. Yet Bay Village offers only a 1.0% credit vs. Avon Lake's 1.5%. Residents who commute out contribute more to Bay Village under the same rate. |
| Rocky River | 21,236 | $94,026 | 2.00% | 1.50% | Mixed residential and commercial, retail corridor. Higher rate at 2.0% with a 1.50% credit. Charges more and offers less credit than Avon Lake. |
| Amherst | 13,048 | $90,725 | 1.50% | 1.00% | More available land, more mixed use. Significantly lower median income. Offers only a 1.0% credit on the same 1.5% rate. Avon Lake's credit is more generous despite a smaller and more constrained revenue base. |
Section 2 | Scope of Impact
A clear, complete accounting of all 25,752 Avon Lake residents and exactly where each group stands. No one should leave wondering where they fall.
The income tax rate and the income tax credit are governed by different authorities under Ohio law. This distinction is central to what action Council can take today.
Section 3 | Foundation
Avon Lake residents interact with two distinct taxes administered by two entirely different entities. Understanding this separation is essential and directly addresses one of the most persistent sources of confusion in this community.
| Dimension | Income Tax | Property Tax |
|---|---|---|
| Based on | Earned income (wages/profits) | Property value |
| Who collects | RITA / City of Avon Lake | Lorain County Auditor |
| Who controls rate | Voters (rate) | Council (credit) | State law / County |
| Primary beneficiary | City services and operations | Schools (largest share) |
| Retirement income | Fully exempt | Assessed on property value |
| Reform proposed | Yes | credit level only | No change whatsoever |
Avon Lake Wage-Earner Workforce | RITA 2023 Tax Year, most recently certified and publicly available
How the Current Credit Works | Worked Examples at $60,000 Annual Income
The work city collects income tax on wages earned there. Avon Lake does not collect an additional share from commuting residents under the current credit structure. Residents are following the rules exactly as written.
Section 4 | Where the Money Goes
This credit reduction is not just about roads. It is about fixing the financial structure of this city so that the general fund can do what it is supposed to do, and capital improvements get their own dedicated source.
For years, Avon Lake has had no dedicated capital budget. Street repairs, drainage improvements, traffic signals, and equipment replacements have been funded by pulling from the general fund, the same pool of money that pays for police, fire, parks, and city operations. That is not a budgeting choice. It is a structural problem caused by a revenue base that was never built to handle both operational and capital needs simultaneously.
The result: no capital budget and no reserves. When the general fund absorbs capital costs, there is nothing left to build a financial cushion. The city cannot plan ahead, cannot handle unexpected expenses, and cannot invest in its own future. Every dollar spent patching a road from the general fund is a dollar that did not go toward public safety, services, or savings.
The credit reduction creates a dedicated, legally earmarked revenue stream for capital improvements, separate from the general fund. That frees the general fund to do its job, begin building reserves, and give the city the financial foundation it has not had in decades. This is responsible governance, not a cash grab.
Section 5 | Your Personal Impact
Enter your own income and work-city tax rate, then adjust the proposed credit level to see exactly how your situation would change. Every number updates in real time.
Section 6 | The Other Lever
The instinct to say "grow the tax base by creating more jobs" is not wrong as a long-term goal. But true financial sustainability for a city like Avon Lake requires multiple revenue strategies working together over time. Job creation is one piece of that puzzle, not the whole answer. And the math below shows clearly why job creation alone cannot close a revenue gap on any timeline the city's infrastructure needs can wait for.
Avon Lake did not set out to be a city where 75% of working residents commute somewhere else. That is the result of decades of decisions that prioritized housing without a broader vision for long-term financial sustainability. Residents do not want more density, more traffic, or more development. Truthfully, there is not much room for it anyway. That is the reality the city inherited. Adjusting the credit structure is the piece available right now and it is also the piece that buys time and resources to build a real, comprehensive financial sustainability plan.
Who Is Employed in Avon Lake | RITA 2025 Employer Reconciliation Data
Three of the seven largest employers in Avon Lake are public institutions. Their employees, many of whom live in this community, have formed the backbone of Avon Lake's income tax base for decades. They are the neighbors who have been contributing the full 1.5% all along.
Job-growth revenue figures are gross and do not net out incentive costs such as abatements, infrastructure commitments, or grants. The Finance Director should model net-of-incentive figures for any specific development scenario.
Section 7 | Legislative History
Council has modified, eliminated, and restored the credit before. This history provides both the precedent for action and a reminder of why how a change is communicated matters as much as the change itself.
Section 8 | Frequently Asked Questions
These questions come directly from Avon Lake residents. Each answer links to the section of this page that covers the topic in full.