The 2013 Popular Annual Financial Report (PAFR) will be in your mailbox shortly, providing an overview of your city's financial health. Taxes and finances are a complicated thing on a personal level, let alone at the city or state level, and the PAFR is our attempt to give you the "CliffsNotes" version of a much larger and more complex document, the Comprehensive Annual Financial Report.
New in this year's PAFR, the revenues and expenditures sections have been expanded to show three years of data.
For example, a now extinct source of revenue -- the estate tax -- had a huge upswing in 2012, at approximately $8.6 million, preceded by a more typical year in 2011 at $3.5 million. Then you see it decline drastically in 2013 as the last of 2012's estates were settled.
You will also see that our section on Capital Reinvestments highlights the city's new 10-year Capital Improvements Plan (CIP). Recently unanimously supported by City Council, the 10-year CIP presents an outline of the work that needs to be done on our streets, sewers and water lines in order to catch our infrastructure maintenance up to acceptable levels.
With an overall price tag of approximately $113 million, it's an aggressive plan that essentially doubles our annual investment at a time when the city's coffers are dwindling. However, few will dispute the need is very real.
This year's special section appropriately summarizes the work of the Citizen Financial Review Task Force, the 13-member group of resident volunteers who agreed to dive into all manner of city finance details over a six-month period.
Charged with identifying options for strengthening the city's bottom line for the long term, the majority of the task force members felt strongly that their findings led to one logical conclusion -- ask UA voters to increase the income tax by 0.5 percent to 2.5 percent this coming November in order to fund our capital needs.
Subsequent to the work of the task force, City Council has now voted to place the question of raising the income tax rate on the November ballot, per the group's recommendation.
Within this section is a table that highlights where income taxes go per $50,000 in salary when you compare different live/work scenarios with our neighbor Columbus. Currently, with UA's income tax rate at 2 percent and Columbus at 2.5 percent, the breakdown is as follows:
* If you live in UA and work in Columbus, you pay the full 2.5 percent, or $1,250, to Columbus;
* If you live in Columbus and work in UA, you pay a total of 2.5 percent in taxes, with 2 percent, or $1,000, going to UA and the remaining $250 to Columbus because its rate is higher;
* If you live in UA and work in UA, you currently pay 2 percent, or $1,000.
Assuming the city's rate increases to 2.5 percent, the scenario changes a little:
* If you live in UA and work in Columbus, you still pay the full 2.5 percent to Columbus;
* If you live in Columbus and work in UA, UA now receives the full 2.5 percent or $1,250, with no balance due to Columbus;
* If you live in UA and work in UA, your taxes increase by 0.5 percent to a total of $1,250.
That little actually means a lot to UA. By equalizing the tax rate for most taxpayers, UA can reclaim revenues that currently go to Columbus or other 2.5 percent municipalities for non-residents who work in our community but live in these higher tax communities.
I have heard a lot of comments of surprise from residents who didn't realize that all of their income tax dollars go to another community, and often at the higher 2.5 percent rate because they work in Columbus.
It's actually a pretty sobering thought when you consider that more than 80 percent of the income earned by working UA residents is earned in other cities and therefore they pay most or all of their income taxes to other communities. And with our limited percentage of land dedicated to commercial activities, we are not attracting that same level of non-residents to jobs in our community.
With the ballot issue pending this fall, now is the time to better understand the city's financial situation. I encourage you to read through your PAFR and get better acquainted with the ins and outs of the city's finances. An online version is available at uaoh.net. Happy reading!
Theodore J. Staton is Upper Arlington's city manager.