Some suburbs evaluating income tax rates
Bexley officials took a wait-and-see position when Columbus considered raising its income tax from 2 percent to 2.5 percent.
Now that the wait is over -- Columbus residents passed the increase on Aug. 4 -- discussion of raising the income tax in Bexley likely will begin after the August council recess, council member Jeff McClelland said.
"It's in the back of everybody's mind that it would be a distinct possibility for Bexley," McClelland said. "Generally speaking, I support the idea of the tax increase."
Of course, residents would have to approve. Any Ohio municipality looking to raise income taxes beyond 1 percent must place the issue before voters.
Bexley resident Bill Todd, who fought against Issue 1 in Columbus, said higher taxes burden the average worker and send an unfriendly message to businesses.
"It's certain, with the Columbus city income tax increase, that all the suburbs are going to have to evaluate the rate or take advantage of the differential," he said.
Columbus now has the highest income tax in the region, meaning those who live or work in the city will pay the bigger rate starting Oct. 1. Most central Ohio cities give credits to residents who pay taxes to their workplace jurisdiction, meaning those municipalities don't impose the full rate against that same income.
For example, a person who lives in Hilliard, which has a 2 percent income tax, and works in downtown Columbus will pay Columbus. Pickerington, however, is one suburb that gives a .5 percent credit, meaning residents who work in Columbus will pay a total of 3 percent rather than 3.5 percent.
Pickerington unsuccessfully tried to raise the income tax to 2 percent last November. City manager Tim Hansley said some type of increase would go back on the ballot in the future. Hansley said the city has had the same rate for 30 years.
"It's just not enough money," he said.
Irrespective of the voters' decision in Columbus, Powell is looking to raise its income tax from .75 percent to 2 percent, council member Daniel Wiencek said.
The proposal could be before voters as early as the primary ballot. Wiencek sees it as a way to shift back money to Powell to pay for capital projects and thinks residents will be supportive.
"I think the residents of Powell want to live in a first-class community," he said. "That's why they live there."
Among suburbs, only Grandview Heights exceeds 2 percent. Its 2.25 percent income tax will retreat to 2 percent Jan. 1, 2011. Gahanna's rate is 1.5 percent.
Some other municipalities, at least for the time being, don't seem to be inclined to go in the direction of Columbus.
David Meeks, economic development director for Hilliard, said he briefly discussed the issue the Mayor Don Schonhardt and the result was "a pretty resounding no."
Todd, the Bexley resident opposed to the Columbus increase, said a lower income tax could be in the favor of the suburbs. Meeks said he's not so sure.
"I don't know if it would be that much of an advantage," he said. "Only time will tell."
Mike Keenan, a member of Dublin City Council, said there's been some informal discussion about increasing the 2 percent income tax "but I don't see it going anywhere here.
"I don't think there's any sentiment at all for that on this council," said Keenan, chair of the finance committee. "I certainly wouldn't support it. I don't see any need for that."