City council finally approved an update to the city ordinance that relates to home-based businesses. I've been working to bring this code up to the 21st century for a long time, because I know that the way things are now are vastly different from the way things were back in the '70s when the code was written.
For instance, in the old code you could only use a teeny weeny part of your home for your business. In my little bungalow, it was limited to 150 square feet, or a space about 10' x 15', which is about a quarter of the upstairs room. And you couldn't store "material or equipment not normally associated with a residential household." And you couldn't use your garage or a shed to store equipment or materials either.
My mission was to make it legal, for example, for a landscaper or snowplower to store more than one lawnmower, or the plow blade, in his garage. For the artist who works on big canvases to have room to move around as he works. For the caterer to have the room she needs to store linens and servingware. For the plumber to keep his stuff, which is not "normally associated with a residential household," in the garage, or the Mary Kay lady to deliver products to her customers in her living room.
South Euclid was always the place where small businesses started, and I want to make it that way again. We should be entrepreneur-friendly.
We added a part that says a home business owner shall register his or her business with the city. It's not a permit. No permit is required. And it's not so that we can inspect anything. We don't inspect home businesses and we have no intention of ever doing so. We just want to know who's doing business in our city, just like we know who's doing business in a commercial area. The information is for our economic development department so that we can help you grow. Maybe you'll start at home and eventually be so successful you'll move into one of our vacant offices or commercial spaces.
You still can't annoy the neighbors with noise or smell or any other nuisance.
TAX MATH #1
I pay taxes for that!
I can't tell you how many times a week I'm told "I pay taxes for someone to do that," whether it's after I've suggested that a resident pick up the litter in front of their home or business, or when I've suggested that someone start a block watch to reduce crime on their street, or any number of things that a person can do to pitch in.
If I have the time I'll walk the resident through the math to show them how little they really pay for all the services the city provides. Usually I don't.
So I'll take this space to run through a few scenarios that may help you feel better about the taxes you pay to the city.
We'll use a $100,000 market value for the house's property tax in all cases, just to keep things consistent. Most of the homes in Ward 4 have values closer to $80,000, but I'm giving you the worst-case scenario (or best case, as home prices are rising.)
A. - Property Tax:
The big thing to remember here is that the city only gets 15% of the property taxes you pay. The schools get 63%, the county gets 17%, and the library and Metroparks split the other 5%.
(1) If you're under 65 years of age, your total tax bill is around $3,600 per year. The city gets 15%, or $540.
(2) If you're over 65, or disabled, with adjusted gross income (what you pay income taxes on) under $30,000, and get the homestead exemption, you're only getting taxed as if your house is worth $75,000, so your tax bill is closer to $2,800 per year. The city gets 15%, or $420.
B. - Income Tax
Income taxes in our city are only based on earned income, meaning if you don't earn wages you don't pay.
(1) If you live on a pension or investments or social security, an don't get a paycheck from a job, you don't pay the city income tax. Zip. Zero.
(2) If you earn wages in South Euclid, you pay 2% to RITA. So...
(a) If you make $50,000 in earned income, we get $1,000.
(b) If you make $80,000 in earned income, we get $1,600.
(3) If you earn wages in another city you get a .75% credit on your South Euclid income tax.
(a) So if you make that $50,000 in Cleveland, we get $625.
(b) If you make $80,000 in Cleveland, we get $1,000.
To see how much you pay us in taxes, put it all together, and...
• If you are retired and have no wage income, and your house is worth $100,000, you pay the city about $540 a year. If you have the homestead exemption you pay less than $500. That's $1.37 a day.
• If you earn $50,000 in Cleveland, and your house here is worth $100,000, your income tax ($625) + property tax ($540) means you pay the city about $1,165 a year, or $3.20 a day. If you earn the money in South Euclid, that goes up to $1,540, or $4.22 a day.
For that amount, you get streets plowed and repaired, police and fire services, trash picked up and recycled, and hundreds of other services we tend to take for granted. FYI, one Emergency Services call costs us about $400.
For comparison, you probably pay more than that for your cable bill, or your daily coffee fix.
TAX MATH #2
"We have one lf the the highest tax rates."
Maybe, but you don't PAY the highest taxes. What the RATE is and what you PAY are two different things. Where property values are high, cities can have lower rates to get the same revenue. Where property values are low, like in South Euclid, we need a little higher rate in order to get the same dollars.
The cost of doing business (fixing and plowing roads, keeping parks open, paying for police, fire, and their vehicles, and gas, and people,) is the same whether you're in Beachwood or South Euclid.
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