With the Pickerington Police Department expected to cost $500,000 more to operate in 2013, Pickerington officials are considering the feasibility of placing a police levy on the ballot in the future, simply to maintain service levels and to help fund a budget that continues to take a larger and larger bite out of the city's General Fund each year.
Finance Committee members met Nov. 7 to discuss funding mechanisms for the police department, and considered the options of achieving that goal through either a replacement levy or an income tax increase.
City Manager Bill Vance outlined the need for a preliminary discussion of the issue.
"In 2013 the police department is going to cost $500,000 more to operate than in 2012, and that is without any additional police personnel other than a dispatcher," Vance said.
Finance Director Chris Schornack said the levy millage in place now has decreased over time because of to the increase in valuation of property since the levy was established.
"The current police levy was passed in 2000 at 5.5 mills," Schornack said. "Due to the reduction factor over time, it currently (is collected at) 3.9 mills," Schornack said.
He explained property tax levies by law are designed to generate a specific amount of revenue at the time they are established. The drawback is that as valuation goes up, more property owners share the burden and the effective millage decreases and the revenue generated stays the same.
Schornack said a replacement levy would bring it back to 5.5 mills, and generate an additional $650,000 annually "to help support our police operations."
He said a replacement levy would effectively "replace" the old levy at its original voted millage.
"If the levy were to fail on the ballot, the current continuous levy would remain in effect, which generated $1.4 million this year," Schornack said.
City Councilman Mike Sabatino proposed the imposition of a 0.25 percent income tax instead of a replacement levy.
He said adhesive to the increase would be a dedicated mission statement which would describe the tax as "rolling back the levy" as well as a commitment to fund specific services over a period of time.
Sabatino asked Schornack to look into whether the current 0.5-percent income tax credit given to those Pickerington residents who work outside the city would be maintained with an additional 0.25 percent income tax.
Schornack said the benefit of an income tax is that "it continues to grow as the population continues to grow" compared to a property tax, which is more static because it is designed to generate a set dollar amount.
But, if income levels fall or large number of income taxpayers lose their income and pay less income tax, those revenues could possibly decline.
"Similar to the replacement levy, an income tax would generate additional funds specific for the police operations," Schornack said after the meeting.
"Income taxes are paid by all residents that live in Pickerington as well as those who work in Pickerington, but live elsewhere."
Vance said he will be working with Schornack to calculate the Police department's operational cost projections from 2013 to 2018.
"These calculations will allow for additional City Finance Committee discussions to better determine the effect of taking even more resources from the General Fund to subsidize the costs of Pickerington's Police Department," Vance said.
Schornack said with the police budget taking such a large chunk out of the General Fund, other crucial city services get a smaller piece of the pie and suffer as a result.
"For 2013, the annual budget for the Police Department is set at $4.66 million," Schornack said.
"The current levy generates $1.4 million of this amount.
"Generally, the remainder of this budget comes in the form of transfer from the General Fund, through which revenues are generated by our 1-percent income tax," Schornack said.
"What this does is place a higher burden on the General Fund, and leaves less monies available for major capital improvements, such as street paving or park improvements."