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VILLAGE COUNCIL IS CONSIDERING INCOME TAX RATE INCREASE
At the November 17, 2025 Council meeting, Village Council held a first reading of an Ordinance increasing the Indian Hill income tax rate from 0.45% to 0.5% beginning January 1, 2026.
Historically, Council has prudently reduced the tax rate five times since 2013 - going from 0.6% to 0.45%. This decision to increase the rate was based on: 1.) the 2026 budget and projected fund balance review; 2.) consideration of the economic conditions and rising costs; 3.) projected infrastructure upgrades; and 4.) the community’s growth.
Why the Increase is Needed:
- Projected Fund Balance Review:
Based on the economic uncertainty during COVID (2020-2022), Council did not make any adjustments to the tax rate. However, similar to trends across the country, the Village had higher than anticipated income tax receipts and year-end fund balances.
In 2023 and 2024, the tax rate was decreased with the intent to reduce fund balances while still maintaining high quality services. It is now time to reverse this intentional reduction in fund balances and set the tax rate to reflect current operating needs.
- Economic Conditions and Rising Costs for Essential Services:
Inflation has significantly increased the cost of supplies and materials needed to maintain streets, parks, waste management and public facilities.
- Infrastructure Upgrades:
Aging infrastructure requires ongoing repair and replacement to ensure safety and reliability. In addition, required technological upgrades and cybersecurity demands have significantly increased.
- Community Growth:
As the Village population expands, so does the demand for additional personnel and equipment associated with the Rangers, the Madeira & Indian Hill Joint Fire District, Public Works and Technology Management.
Impact on Residents:
This change represents an increase of approximately $50 per $100,000 of adjusted gross income. Council emphasizes that this adjustment will help to protect the long-term financial stability of the Village while continuing to deliver the high quality services residents expect.
Commitment to Accountability:
As the Council remains committed to transparency and fiscal responsibility, please refer to the charts highlighted alongside this article as well as the 2026 Budget located at https://indianhill.gov/departments/finance/ for detailed information
In addition, please feel free to contact Mr. Scott Gully, Finance Director, at 513-561-6500 or [email protected] with questions.
As both graphs show, the Village benefited from unusually high fund reserves due to higher than anticipated income tax receipts and unexpected COVID revenues in past years. Consequently, Council decreased the tax rate by 14.3% since 2019 to reduce the fund balances while still maintaining high quality services, upgrading infrastructure and accommodating for the Village’s growth.
However, this shift is causing reserves to begin declining significantly over the next years.
Consequently, Village Council is considering a tax rate increase from 0.45% to 0.5% to slow the decline of the Village’s General Fund reserves.
Without this adjustment (Chart #1), reserves would fall significantly faster due to increasing operating costs and long-term infrastructure needs.
Even with the tax increase (Chart #2), projections show that reserves will continue to decrease—just at a more manageable rate. This highlights the importance of ongoing cost control efforts and careful long-term planning.
Council made this decision to protect financial stability and ensure that the Village can continue delivering high-quality services while meeting rising costs.
Council will continue its annual review of the income tax rate to ensure that the rate matches the Village’s financial needs, protects long-term service levels, and aligns with future capital requirements. This annual review process allows Council to adjust—up or down—based on updated financial conditions, community priorities, and reserve trends.