Tax hike request could replace income tax credit cut
Reynoldsburg City Council's finance committee opted Monday, June 17, to pull back -- at least temporarily -- from a contentious income tax credit reduction proposal as a way to bring in more money.
Instead, the committee voted 5-1 to have an ordinance prepared for the full council's consideration to place a 1-percent income tax increase issue on the fall ballot.
If approved, that would increase the city's income tax rate from 1.5 percent to 2.5 percent.
Councilman Chris Long cast the only dissenting vote. Councilwoman Leslie Kelly was absent.
Council heard the first reading June 10 of an ordinance to cut the city income tax credit in half. Doing so would mean Reynoldsburg residents who work outside the city -- about 80 percent of employed residents -- would pay a 0.75-percent income tax to the city on top of whatever they pay the city where they work.
During the finance committee meeting June 17, Councilman Mel Clemens, who first initiated discussions of the tax credit reduction last month, made a motion to "send the tax credit reduction ordinance to council for a second reading, then back to committee to be held."
Councilwoman Monica DeBrock then made a motion to create an ordinance to put a 1-percent income tax increase on the fall ballot.
"We can all agree that we love the community and none of us enjoy paying taxes," she said. "We will never come to a complete consensus on everything we want for the city. The city has the power to do a tax credit reduction, but I want to put it to the voters in the form of a tax increase on the fall ballot."
"Our mayor sees the city every day," DeBrock said. "Tell us, Mayor, do you think the city has an urgent need for more revenue?"
Mayor Brad McCloud said his short answer is, "Yes."
"When our annual general budget is tens of millions less than other cities our size, it means we are falling behind," he said. "I think this should go on the ballot again.
"It's not sexy to pave roads, but we have a challenge with our roads.
"I will make do and administrators will make do with what we have, but when I see that our budget is $14 million and Gahanna's is $25 million, I know that we are just treading water and falling behind many other cities."
Auditor Richard Harris said an ordinance to seek an income tax increase would have to be approved before Aug. 7 in order to have the issue on the November ballot.
Long said the either-or situation that has been set up is unfair to residents.
"By voting to send the tax income reduction ordinance for a second reading then a hold, then putting a tax issue on the ballot, you are effectively holding a boulder over people's heads and saying if you do not approve this ballot issue, we will do a third reading on the reduction and raise your taxes anyway," Long said.
Clemens countered by saying, "I did not want this put on hold to put a boulder over people's heads."
"I wanted to hold the income tax reduction so that we could discuss putting a tax issue on the ballot," he said. "I'm doing this for the benefit of Reynoldsburg. We don't have enough money to function well compared to other cities of our size. I was elected to do a job and I'm trying to do it."
Harris had said during earlier discussions about the tax increases that the tax credit reduction would actually affect more people, because 80 percent of employed residents would pay 0.75-percent income tax to Reynoldsburg, instead of getting 100 percent credit for taxes they pay to other municipalities.
If an income tax increase is put on the fall ballot and approved by voters, those who work outside Reynoldsburg would not have to pay additional taxes, while the 20 percent of employed residents who live and work in the city would pay an additional 1 percent in income taxes.
Resident Laura Cloud spoke against the tax credit reduction.
"I believe every law is an outgrowth of someone's morals," she said. "Your ability to increase our taxes without voter approval is a moral issue. To even consider taking money out of our pockets without our permission, you are dismissing our spot in the city. Don't forget who you answer to."
She said council members should come to a consensus on what they want for the city, then ask for a ballot issue so that voters can decide.
"We have gotten into a situation where we need money desperately," resident Norm Brusk said. "I don't think we have time to do another tax issue that people will put down at the ballot. People need to understand that we can't keep kicking the can down the road."