Upper Arlington City Council opened discussion this week about a possible 0.5-percent income tax increase on the Nov. 4 ballot.
Although most members didn't state their stances Monday, June 23, on a recommendation to increase the city's income tax rate from 2 percent to 2.5 percent, a decision is looming.
Council is expected to determine if the measure, which was recommended by the council-appointed Citizen Financial Review Task Force, will be approved at its July 14 meeting.
An affirmative vote would provide enough time to file language with the Franklin County Board of Elections by Aug. 6, the deadline for placing items on the Nov. 4 ballot.
At a June 23 hearing, the first of three scheduled on the proposal, council members and city staff reiterated Upper Arlington's need to generate more revenue to address $113 million in capital improvement projects identified as being needed over the next 10 years.
No one from the public spoke to the issue Monday.
The task force estimates a 2.5 percent local income tax would increase Upper Arlington's annual revenue by $3.5 million, and that influx could be applied to capital projects such as street repairs and maintenance and upgrades to stormwater systems.
While there was some debate as to whether the city should seek an income tax or property tax levy, at least two members said they tentatively support the task force's recommendation to pursue an income tax increase.
Council Vice President Debbie Johnson said communities such as Columbus, Bexley, Grandview Heights and Worthington already have a 2.5 percent income tax, and more than half of Upper Arlington's residents wouldn't be affected by a local increase because they already pay that rate to the communities in which they work.
However, she pointed to the task force's finding that a property tax increase could adversely affect Upper Arlington senior citizens and homeowners with fixed incomes.
"We pay a lot in property tax," Johnson said. "That's the perception here.
"To me, I think we're leaving some money on the table through the (current) income tax. I think the first step is to even this out."
Likewise, Councilman David DeCapua said an income tax increase makes sense because income tax revenues grow as the number of jobs and salaries in the city grow.
"Frankly, I like the volatility of an income tax because it's not always the same," he said.
Currently, Upper Arlington's largest source of revenue is its income tax, which last year brought in $16.8 million, representing 48 percent of Upper Arlington's general operating fund.
The second-largest revenue stream comes from property taxes. Although the city receives only about 9 percent of the total property taxes paid by residents -- approximately 65 percent goes to Upper Arlington schools and 25 percent to Franklin County -- it generates approximately $10 million annually for the city.
The "volatility" of the income tax, however, is one of the reasons Councilman Erik Yassenoff said he's leery of an income tax increase and might favor a property tax increase.
"The (task force) report over and over again refers to the income tax as a volatile source of revenue and the property tax as more stable," he said.
Another perspective came from Councilman Mike Schadek, who questioned whether increasing the income tax, which likely would only affect about 46 percent of residents, is the best way to address paying for infrastructure, which everyone in the city uses.
"We do have to do something about revenue, but does it make sense to put that burden on less than half of our residents?" Schadek said.
Council plans to hold two additional readings of legislation to place a 0.5-percent income tax increase on the ballot during its July 7 and July 14 meetings, both slated for 7:30 p.m. at the Upper Arlington Municipal Services Center, 3600 Tremont Road.
"We will have two more council sessions on the ordinance itself," said Don Leach, Upper Arlington's mayor and council president. "Where I think we go from here is we will have a conference session on July 7, but with this item on the agenda for comment, in addition to the meeting on the 14th."