"To tax or not to tax: Does the city of Reynoldsburg really need a tax issue?"
That was the question Reynoldsburg City Council members were asked to answer at the Reynoldsburg Area Chamber of Commerce's Sept. 5 lunch meeting.
Guest speakers at the event, held at Tumbleweed Southwest Grill, were Auditor Richard Harris and Reynoldsburg City Council members Scott Barrett and Barth Cotner.
Issue 23 on the Nov. 5 ballot is a request for a 1-percent increase in the city's municipal income tax rate, from 1.5 percent to 2.5 percent.
Harris said the increase, if approved by voters, would generate about $5 million annually for the city.
He said if the income tax hike is approved, it would mostly affect people who live and work in Reynoldsburg, not the 80 percent who work outside the city. However, it would affect residents who work in a municipality that has an income tax less than 2.5 percent, or residents who work in a township, since townships do not collect income taxes.
Harris said the last time a tax hike was approved was in 1982.
"A tax increase went down on the ballot in 2005; went down twice in 2006 and in 2011," he said.
He said when Abercrombie and Fitch moved out of Reynoldsburg in 2002, the initial loss was $2 million, but the accumulated loss to date is $20 million.
In addition, he said, cuts in Local Government Fund from the state resulted in an accumulative loss of $1.3 million since 2011 and cuts in the state income tax since 2005 have resulted in a $3.5 million loss.
"This year's cut in estate taxes means we will lose an additional $250,000 in revenue," Harris said.
Before asking for the 2011 tax increase, city leaders asked a committee of community members to prepare an ad hoc committee report, which is posted on the city website at ci.reynoldsburg.oh.us and accessible by clicking on the city council link.
"That committee said we had a structural imbalance in the city and that we had been continually reducing what we spent on city services and capital improvement," Harris said. "We spent about $240,000 that year, or 2 percent, when we should have been spending $2.5 million or $3 million.
"In other words, the city has been kicking the can down the road," he said. "The recommendation of that committee was to ask voters for a 1-percent tax increase. That committee also said that if the income tax increase did not pass in 2011, we should either reduce or eliminate the tax credit."
The tax credit is a 100-percent credit on income taxes the city gives to residents who work outside Reynoldsburg and who have income taxes taken out of their paychecks by the city where they work, Harris said.
Reynoldsburg City Council's approval to cut the city's tax credit in half was vetoed by Mayor Brad McCloud July 25.
McCloud said reducing the tax credit sent the wrong message to voters because it would force a tax increase without voter approval at the same time council was putting a tax issue on the ballot.
Harris said Reynoldsburg brought in only $474,860 in property tax revenue last year, compared to Grove City, which collected almost $2.9 million; Gahanna, which collected $1.9 million and Hilliard, which brought in $1.2 million.
As for income tax revenue, Harris said Grove City collected $19 million; Reynoldsburg about $12 million; Gahanna $14.9 million and Hilliard, about $19 million.
In general fund expenditures, Reynoldsburg spent $14 million; Grove City spent $29.8 million; Gahanna spent $26.3 million and Hilliard spent $18 million last year.
He said in estimating the value of services supplied to each resident, Reynoldsburg spends $390.28 per resident; Grove City spends $828.72; Gahanna spends $783.04 and Hilliard spends $646.23.
"The problems we have in this city include a lack of capital investment, an increase in crime in certain areas where we should hire more policemen and a change in demographics, so that more people are renting instead of buying houses in Reynoldsburg," Harris said.
Barrett said the ad hoc committee report "said in a nutshell that we should run the city like a business."
"We have been operating that business without enough income for too many years," he said. "Every year we get further behind on fixing our streets and maintaining our infrastructure."
Cotner said he would like to see the city have some of the amenities that other cities do, such as a community center.
"We have to get back to quality-of-life issues," he said. "There are a lot less options in Reynoldsburg for families. We have great parks here, but we need the money to improve and maintain those parks. We could also probably use, depending on who you talk to, at least eight to 12 more police officers for a city this size."
Cotner said the Brice-Livingston corridor has become more unsafe, with more crime. He said more police officers could help that problem.
"These are very real issues in which we need more revenue," he said. "I think if you look at where we have been in the past and where we are now, that most people would not like the direction we're going."
Harris was asked if Reynoldsburg would experience a budget shortage if the tax issue did not pass.
"It is not a question for this year," he said. "We will not have a shortfall this year -- we will have about $2.5 million in the general fund. But it is the fact that we are not spending money on roads and capital improvements. If you drive through a lot of our roads, such as Davidson Drive, you can tell that we are not repairing roads and that our infrastructure is crumbling."