Tax credit cut headed for first reading June 10
An ordinance that would cut the city’s income tax credit in half and raise taxes for more than three-fourths of Reynoldsburg residents – without voter approval – will get a first reading at the June 10 Reynoldsburg City Council meeting.
The legislation was drafted May 24 and discussed during the finance committee meeting Monday, June 3.
Reducing the tax credit by 50 percent would mean residents who worked outside the city would pay a 0.75-percent income tax to Reynoldsburg – half of the 1.5-percent city income tax – on top of whatever they pay the city where they work.
Council members all agreed the city needs to bring in more revenue, but several were opposed to raising taxes without voter approval.
“I am adamantly opposed to reducing the tax credit,” Councilwoman Leslie Kelly said. “It is not fair to our citizens to raise taxes without giving them a chance to vote. We just increased water and sewer rates. I would support putting a tax increase on the ballot, but not using the back door to get that tax increase.”
Councilwoman Monica DeBrock said she thinks there is a need for increased revenue, “but how we get there is the question.”
“For me to support a tax increase, it would have to go to the voters,” she said. “The biggest issue is, what are the city’s needs? We have to be forthright with facts and figures.”
City Auditor Richard Harris confirmed that Reynoldsburg needs more revenue to keep up with the cost of repairing streets and other infrastructure.
“In 2002, when The Limited moved Abercrombie and Fitch to New Albany, with that move went more than $2 million a year,” he said. “The city had to reduce the CIP (capital improvement projects) allotment from 15 percent to 2 percent.”
He said Reynoldsburg’s police department also needs more officers.
“You will need additional revenue for roads and other needs,” he said. “You could go to the ballot for a road levy for different projects.”
He said the city’s credit rating could also drop as assets depreciate.
DeBrock wanted to know if the city could put a tax issue on the ballot to raise the income tax, but stipulate that if it passes, the tax credit could be restored.
Councilman Chris Long objected to that, noting he has attended CIP meetings.
“A lot of projects were on a wish list,” he said. “I find it shameful that we are treating our citizens like 6-year-olds and telling them if they behave and vote for higher taxes, we won’t reduce the tax credit. We are repaving some streets and we are doing payroll increases – we are not broke, people.”
Councilman Mel Clemens said some street repairs have been put off for years.
“When you do a street program, you should allocate at least $2 million per year,” he said. “We need a bigger police department and I think we need a development director. I don’t want to see this city go downhill. We need money to put us back up where we belong.”
Clemens said council should pass the tax credit reduction and “then discuss what to put on the ballot.”
“We have to take some kind of action,” he said. “If we put something on the ballot, we can give the credit back.”
Councilman Cornelius McGrady III said he is in favor of the tax credit reduction and bringing a tax issue to voters.
“I talked to a voter who thought we had failed to come to a consensus on the needs of the city,” he said.
Councilman Barth Cotner said the problem is, “we all differ on our vision for the city, although we all want the city to grow.”
Councilman Scott Barrett said Reynoldsburg is “at a crossroads.”
“How we handle it will affect this town for years to come,” he said. “I don’t like the idea of being like a parent and deciding without voter approval. But people in my ward also know that I believe in protecting their property values.”
Council President Doug Joseph said if the tax credit reduction were approved, citizens could challenge it with a referendum to get it on the ballot.
“Tying the tax credit reduction with a tax issue on the ballot could mean voters could take them both out at the same time,” he said.
The June 10 council meeting will start at 7:30 p.m. at Reynoldsburg City Hall, 7232 E. Main St.