Pickerington City Council will consider for the first time next week whether to ask residents to support doubling the city's income tax to 2 percent.

Pickerington City Council will consider for the first time next week whether to ask residents to support doubling the city's income tax to 2 percent.

A companion piece of legislation that would reduce the amount paid by those who work outside the city also is on the agenda for council's next regular meeting June 3.

Both pieces of legislation were approved to move forward May 21 by council's finance committee.

To make it onto the November ballot, the income tax ordinance has to be submitted to the Fairfield and Franklin county boards of elections by Aug. 21. That means council has to complete its third reading of the legislation no later than July 21.

The legislation changing the credit granted to Pickerington residents who pay income taxes outside the city does not have to go before voters.

The city has not raised its income tax from the initial 1 percent adopted in 1976. Pickerington has the lowest municipal income tax among Franklin County cities and among the lowest in Fairfield County, according to the Ohio Department of Taxation.

Residents who work outside the city currently receive a 0.5-percent credit against the rate they pay in the city in which they work. Council is considering changing that to a credit of up to 1.5 percent. In both cases, there is a minimum tax of 0.5 percent paid to Pickerington.

The result would be that only residents who work in Pickerington or in a city with a tax rate below 1.5 percent will see an increase in the amount they pay.

For example, Pickerington residents who work in Westerville currently pay Westerville's 1.25-percent income tax plus 0.5 percent to Pickerington for a total of 1.75 percent. If voters approve the increase and council changes the credit, those same residents would pay Westerville's 1.25-percent tax as well as 0.75 percent to Pickerington, for a total of 2 percent.

Residents who work in a city with a tax rate higher than 1.5 percent - such as Columbus, which charges 2 percent - will pay that city's tax plus 0.5 percent to Pickerington. That will remain unchanged if council approves the new credit structure.

Pickerington residents who work in the city will pay the full amount of the additional 1 percent, or $500 for every $50,000 in income.

City officials estimate that only about 20 percent of Pickerington residents work within the city.

"The issue isn't what you pay," council President Cristie Hammond said last week. "It's what you are willing to pay to support the city you live in."

By raising the income tax, city officials hope to raise the more than $1-million a year the city needs to meet its current debt obligations and begin providing services that have been neglected for the past several years - particularly street paving.

Council member Tricia Sanders said that while she opposes increasing taxes in general, an income tax increase, as opposed to increasing property taxes, seems to make the most sense.

"It just seems like this is the least impacting on the most people," Sanders said. "We have a huge senior citizen base that this won't impact."

Income tax revenue accounts for about $4-million of the city's approximately $7-million general fund, city manager Tim Hansley said. In 2003, the city collected about $2.3-million in income taxes from people who work elsewhere.

If an income tax increase makes it to the ballot and is approved by voters, it could generate about $1.7-million in new revenue for the city. That amount would be reduced by the change in how much credit is granted.

But even that will keep the city on a tight budget.

City finance director Linda Fersch said Pickerington needs to raise $800,000 to $1-million in additional annual revenue to pay off its current debts and break even, including more than $7-million for widening and improving Diley Road.

Hansley said the city staff has been making changes to deal with the rising cost of fuel and the drop in impact fees collected as the housing market has declined.

There is currently a hiring freeze and the police department is investigating more fuel-efficient vehicles, he said.