The income tax rate in Grandview Heights increases to 2.5 percent beginning today (Thursday, July 1).

The income tax rate in Grandview Heights increases to 2.5 percent beginning today (Thursday, July 1).

The income tax increase was overwhelmingly approved by voters on May 4.

The city will begin seeing the increased tax revenue in August, according to Bob Dvoraczky, director of finance.

"R.I.T.A. (the Regional Income Tax Agency) is telling us that we can expect about $165,000 in additional revenue for the last six months of this year," Dvoraczky said.

The city's income tax rate is increasing from 2.25 percent to 2.5 percent.

The temporary 2.25 percent tax rate was slated to revert back to the city's original 2 percent level at the end of this year.

The credit given to residents for income earned outside Grandview is also increasing from 2 to 2.25 percent.

The levy also included a provision that 5 percent of all city income tax revenue will be earmarked for capital expenditures.

R.I.T.A. inserted notices of the tax increase with the quarterly individual bills mailed late last month to residents and notified Grandview businesses in May that they must begin withholding 2.5 percent beginning July 1.

"I think R.I.T.A.'s done a good job making sure everybody knows about the change," Dvoraczky said. "We didn't have problems that last time the tax rate changed, and I expect this transition to go smoothly as well."

The income tax increase means Grandview residents who work in the city will pay the 2.5 percent rate.

Residents who work in Columbus or other municipalities that have a 2.5 percent income tax will continue to pay .25 percent to Grandview because the credit for income earned outside the city has increased from 2 to 2.25 percent.

"They won't see any change," Dvoraczky said. "They were paying (a total) of 2.75 percent before July 1 and they will pay the same after July 1."

The key to the income tax increase is that non-residents who work in Grandview will now be paying 2.5 percent to the city, he said.

When the city's rate was 2.25 percent, Grandview lost out on .25 percent of the taxes paid by non-residents who worked in Grandview but lived in a municipality with a 2.5 percent rate, Dvoraczky said.

For every $10,000 in income the .25 percent increase in the city's income tax rate will generate an additional $25, he said.

"We sought this tax levy so we could continue to maintain our programs and services," Dvoraczky said. "The nice thing about the income tax rate is that we're having non-residents help our community."

As Grandview Yard and other projects develop, more people will come to work in the city and the income tax will generate more revenue for Grandview, he said.

Although he anticipates few problems, Dvoraczky said he would encourage residents to check their pay stubs to make sure the proper amount of tax money is being withheld for the appropriate municipality.

More information about the income tax is available by clicking on the "Get Tax Information" section on the homepage of the city's website, www.grandviewheights.org. The section includes answers to frequently asked questions, a link to the R.I.T.A. website and contact information for Bob Curtin, the city's tax consultant.