Upper Arlington will ask its residents in November to approve the city's first income tax increase in 31 years.
Upper Arlington City Council voted 6-1 Monday, July 14, to place an issue on the Nov. 4 ballot that would raise the local income tax from 2 percent to 2.5 percent.
The action was in line with a recommendation made last month by a 13-member, council-appointed advisory panel dubbed the 2014 Citizen Financial Review Task Force, which said the additional taxes would bring in $3.5 million annually in new revenue for the city.
Those extra dollars are needed, the task force and city officials have maintained, to fund approximately $113 million in infrastructure projects, such as street repairs, curbs, gutters and stormwater systems, identified by the Upper Arlington Engineering Division as being needed over the next 10 years.
"Council has agreed to fund a capital improvement program and the issue is how to fund it," said Don Leach, Upper Arlington's mayor and council president. "We have an aging infrastructure that needs attention."
If approved, the tax hike would be the first to the city's income tax since 1983, when voters approved an increase from 1.5 percent to 2 percent.
The task force and some council members noted that increasing the local rate to 2.5 percent would put the city on par with Bexley, Columbus, Grandview Heights, Whitehall and Worthington, where many city residents work and pay income taxes.
According to Upper Arlington Finance Director Cathe Armstrong, 55 percent of residents wouldn't be affected by the increase because they're already paying 2.5 percent to cities where they work.
"It would bring Upper Arlington into line with other central Ohio communities," council Vice President Debbie Johnson said.
Two residents spoke about the issue Monday.
Task force member Ted Bernert said Upper Arlington needs additional revenue to address its deteriorating infrastructure. He said the 2.5-percent rate has become the "standard" for central Ohio income taxes.
However, resident Mark Calvary said he would be affected by the tax increase and opposes it, noting that residents also pay fees for stormwater use and ambulance assistance.
"Columbus doesn't have all those other additional taxes we have," he said. "If I want to throw away trash, I have to buy a sticker, OK? If I want to recycle, I have to pay a fee.
"In my opinion, we're not doing a good job of reeling in expenses," Calvary said. "In my opinion, the city doesn't have a problem with income. The city has a problem with spending."
Councilman Erik Yassenoff cast the lone dissenting vote on the tax, saying a property tax increase would be more equitable, simple and stable, and would bring a "low rate" that is "broad-based."
However, Yassenoff also voted against two pieces of legislation that would have raised the amount of millage the city collects on property taxes from 6.4 mills to about 10.4 mills.
Upper Arlington's property tax rate is 78.83 mills, according to Armstrong, but the bulk of that goes to Upper Arlington schools, local libraries and Franklin County.
The property tax increase proposals, if placed on the ballot and approved by voters, would have raised annual costs for the average Upper Arlington homeowner by about $485. Both failed by 0-7 votes. Leach and Johnson said raising property taxes would adversely affect senior citizens and people on fixed incomes.
Having plotted a course with the income tax issue, Leach said it represents a chance for the city to celebrate its 2018 centennial with a renewed commitment to the community.
"It's time to preserve our heritage," he said. "It's time to preserve what we are, which is a first-rate inner-ring suburb."