Most residents could be in for a tax increase if Reynoldsburg City Council agrees to cut the city's income tax credit in half.
Members of the council's finance committee agreed Monday, May 20, to draft a city ordinance that could raise taxes for more than three-fourths of Reynoldsburg residents -- without voter approval -- by reducing the city income tax credit by 50 percent.
Only Councilman Chris Long opposed the idea.
Councilman Mel Clemens said lowering the tax credit may be the only way to save an aging and crumbling city infrastructure.
"Our streets are falling apart, so how are we going to pay for them?" he asked. "We either have to reduce the tax credit or go to a road tax to make the streets safe.
"We can't keep putting off street repairs year after year," he said. "We may be breaking even as a city, but we are not going up, not improving."
Clemens said eliminating the tax credit entirely would generate about $6 million annually for the city. With a 50-percent reduction in the credit, the city would receive $3 million annually.
Long said if the tax credit were eliminated, residents working outside the city would pay the 1.5-percent Reynoldsburg city income tax on top of whatever they pay where they work. Reynoldsburg residents who work in Columbus, for instance, would pay 1.5 percent to Reynoldsburg and 2.5 percent to Columbus -- a total of 4 percent.
A 50-percent decrease in the tax credit would mean paying 0.75 percent of the Reynoldsburg income tax on top of whatever residents pay the city where they work, he said.
"What about the young family or the single mothers?" Long asked. "Are we saying we know better what $300 extra in taxes could mean for them? Franklin County is talking about raising taxes again also.
"I believe we are being smart with taxpayer money, sharing resources such as the human resources manager with the schools," he said. "This is not the time to put an additional burden on the backs of taxpayers."
Council President Doug Joseph pointed out that residents have three times rejected ballot issues that would have raised the city income tax, twice in 2006 and in November 2011.
He said council may be able to rescind the tax credit, but that would not stop residents from challenging that with a referendum petition to get the decision on the ballot.
"Raising taxes went down three times," he said. "We could be simply overturning what the voters want. Just because you rescind the credit, it could be very short-lived."
Councilman Cornelius McGrady III said he would welcome discussions on the issue.
"In terms of development, we have no incentives that will attract businesses to Reynoldsburg," he said. "We need to establish some funds and I'd like to come to a consensus on the tax credit."
Councilman Scott Barrett said an ad hoc committee report in 2012 pointed out that the city "is doing a tremendous amount with very little revenue."
"Right now, though, I think we are at a crossroads," he said. "We have to start investing in our city and not just let things decay."
Councilman Barth Cotner said council "has done a good job in reducing spending."
"We have to decide as a city where we want to be," he said. "We also have to do a better job of getting that message to our community."
Councilwoman Monica DeBrock said Columbus increased its city tax rate and was able to improve and attract new businesses.
"I believe our infrastructure is extremely important and that quality of life for our residents means having jobs and housing," she said. "If we reduce the tax credit by 50 percent, though, young professionals would pay 3.25 percent, when they could live elsewhere and pay 2 or 2.5 percent.
"I think we do need to be competitive, though, and need to make sure the general public knows how much we need revenue," she said. "But I think we should put it to voters to decide if they want to increase their taxes."
Clemens said he would like to "fill up City Hall" with residents discussing the income tax credit.
"If it comes to a vote and people vote it down, I would shut up about it or say people don't care enough about the city of Reynoldsburg," he said. "We have to do something to save our infrastructure, whether it is a road tax or reducing the income tax credit."