Rate increase with 100% credit
Gahanna mayor outlines income-tax scenarios
Gahanna residents could see more service and expansion of multipurpose trails if voters go to the ballot May 7 and approve an increase in the city's income-tax rate from 1.5 to 2.5 percent.
If the issue isn't approved, Mayor Becky Stinchcomb said, city staffing levels and equipment for all departments, including the police force, would be at "considerable risk."
In conjunction with the tax request, Stinchcomb is requesting that council adjust the credit given to residents who pay income tax to other municipalities from 83.3 to 100 percent.
Council is expected to discuss the tax rate increase during its Jan. 28 committee meeting.
To meet the Franklin County Board of Elections deadline for May, council would have to approve a resolution with proposed ballot language by Feb. 6.
Stinchcomb said the city has been working to identify the needs of residents today and in the future through the recent community satisfaction survey and five-year-needs assessment.
"If we are successful at reforming our income tax, we will be able to sustain or re-establish past service levels," she said. "We will also be able to continue to invest in our community by implementing our capital improvements."
Some of those improvements would include expansion of the city's multipurpose trail system, including the Big Walnut Trail, rebuilding the failing Gahanna Swim Club and rebuilding and maintaining roads.
"The revenue will allow us to complete the items in the five-year-needs assessment, as well as return service levels to pre-recession norms or beyond," Stinchcomb said. "Even more importantly, we should be able to sustain current services, acceptable maintenance levels and reasonable capital improvements for the foreseeable future. We should have most of the tools we will need to truly keep Gahanna an exceptional city, as we have envisioned."
If the issue goes to the May ballot and fails, Stinchcomb said, the city will have difficult decisions regarding all city services.
She said staffing levels and equipment needs of all departments would be at risk.
Other areas she identified as at-risk include the parks system and parks maintenance, road maintenance, economic development investment, basic services and such community enhancement programs as the street-sign program and continuation of multipurpose trail construction.
She said facilities such as the Gahanna Swim Club likely would have to close when the 50-year-old pool fails.
"We'll look at our snow-removal policies," she said.
Stinchcomb said most of the items in the needs assessment wouldn't be funded.
Also in jeopardy would be the city's ability to provide matches to critical state and federal grant programs that help the police department, street enhancements and Enterprise Fund projects.
Finance director Jennifer Teal said the recommendation for a 2.5-percent rate with 100-percent credit would allocate the cost of city services fairly among users.
If approved, Stinchcomb said, the increase would close the $8 million gap the city faces and would align the tax structure with the direction of the region.
Central Ohio communities with a 2.5-percent municipality tax rate are Columbus, Bexley, Grandview Heights, Whitehall and Worthington. Communities with a 2-percent tax rate include Dublin, Hilliard, Grove City, New Albany and Westerville. She said Gahanna is one of only two cities of comparable size in central Ohio that's still trying to make ends meet at a 1.5-percent tax rate. Reynoldsburg is the other.
"Most of our residents will see little to no change in their local tax bill, and they will reap the benefits of the investment we will be able to make in the community," Stinchcomb said.
When a city changes its tax rate, Teal said, the Regional Income Tax Agency projects the city would receive 60 percent of anticipated planned revenue the first year, 80 percent of planned revenue the second year and 100 percent of planned revenue the third year.
If a levy goes on the ballot in May and is approved, the new rate would be effective beginning Jan. 1, 2014.
"The voters must decide whether or not this is the time to reform our tax code," Stinchcomb said. "Council must vote to allow this issue to appear on the ballot, but the decision to approve or deny such a change belongs directly to our citizens."
According to the city's figures, Gahanna has 19,584 residents who filed with RITA. Only 1,522 work in a nontaxing municipality and would pay the higher tax rate in Gahanna. The other working Gahanna residents who pay income tax to another municipality -- whether the rate is 1.5, 2 or 2.5 percent -- would receive a 100-percent credit, though those who pay less than 2.5 percent would have to pay the difference to Gahanna. All nonresidents who work in Gahanna would pay the higher rate.