Reynoldsburg News

Council sets tax hike decision for July 14

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Reynoldsburg City Council will vote July 14 on a resolution to place a half-percent income tax increase on the November ballot, with the money generated to be earmarked for capital improvements.

The 6-1 finance committee vote Monday, July 7, came after it appeared members had reached an impasse on how to proceed in dealing with Reynoldsburg's financial situation.

Residents have voted down the city's last four attempts to raise taxes.

All members of council sit on the finance committee.

Councilman Mel Clemens, who said last month he would support an income tax hike but preferred a reduction in the city income tax credit, said he had changed his views, but refused to explain why when pressed by Councilman Dan Skinner.

"At this point, I would not support either an income tax hike or reduction in the tax credit," Clemens said.

"I have my reasons for not wanting either tax issue right now," Clemens said after the meeting. "I'm in the process of working out some things that I think are problems in the city. I'll share my reasons if I vote no next week."

"This problem is not going away," Councilman Scott Barrett said in opening the discussion about the city's revenue needs.

He said crumbling roads and shrinking revenue mean the structural imbalance in the general fund and capital improvement fund noted by a 2011 ad hoc committee is getting worse.

"The gap is expanding," he said. "We can't throw money at it that we don't have."

Barrett said he would support a half-percent income tax hike, "but I don't think it will hold water as far as what we really need."

The 1-percent tax hike that failed in November would have generated about $5 million annually for the city, City Auditor Richard Harris said.

If council passes the resolution next week and the tax issue is approved by voters Nov. 4, it would raise Reynoldsburg's city income tax rate from 1.5 percent to 2 percent and generate about $3 million annually for the city's capital improvement fund, according to Harris.

It would increase income taxes for residents who work in Reynoldsburg or in any city with an income tax rate lower than 2 percent. It would also increase taxes for residents who work in a township, since townships do not collect income taxes. Residents who are retired or not working would not be affected by the tax hike, he said.

Councilwoman Leslie Kelly asked how the money could be earmarked for only capital improvements.

Harris said the capital improvement fund is a subsidiary of the general fund and can be used only for streets, parks and any capital improvements.

"The money could not be used for police officers, however," he said. "We do not have the flexibility to move that money forward for anything but capital improvements."

When Councilman Barth Cotner asked if the committee could come to some kind of consensus, the discussion stalled into silence.

"We still sit here with no real decision or direction," Cotner said. "My concern is that I don't think it does much good to our desire to convince the public if we don't believe in it ourselves."

Then Kelly made a motion to move the half-percent tax hike resolution forward to consideration by the full council as an emergency. Barrett seconded the motion.

Kelly said she made the motion for the tax hike because the revenue would be earmarked only for capital improvements.

"It would also free up money in the general fund that would otherwise be used for capital improvement, so those funds could address other needs," she said. "This way, people would have more of an idea how we would use the money. I think people want to know where the money is going."

The July 14 meeting will start at 7:30 p.m. at the Reynoldsburg Municipal Building, 7232 E. Main St.

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