The cumulative loss of estate taxes and a decline in local government funds from the state has created an infrastructure maintenance crisis for Powell, reports the city's Citizen Financial Review Task Force.
The task force unveiled details of its six-month study July 10 at the city municipal building. On June 19, tax-force members told city council they recommended raising the income-tax rate from 0.75 percent to 1.15 percent. They also recommended increasing the credit from 0.25 percent to 0.5 percent for residents who live in Powell but work in and pay income taxes to another municipality.
As part of the plan, 25 percent of the new total 1.15 percent tax rate would be allocated specifically to infrastructure-maintenance needs.
Task-force chairman Richard Cline, a former city council member, said challenges have been building for about eight years, since the Ohio General Assembly slashed local government fund revenue sharing.
"The city has been aware of this problem for a significant amount of time," he said.
The city has grown rapidly for 30 years, he said, increasing infrastructure including streets and sewer lines. During most of that time, infrastructure maintenance was funded by estate taxes and the local government fund, plus some grants. Powell's income-tax rate has remained the same for 27 years.
Powell has 120 lane miles of streets and roads, 77 miles of storm sewers and 24 miles of bicycle paths.
Documents summarizing the task force study said the city needs an additional $2 million a year to effectively address infrastructure maintenance, much of it deferred in recent years as the funding crisis grew.
No longer available is about $567,000 the city received annually in local government funds. Estate-tax receipts varied but could reach hundreds of thousands of dollars in some years. The Ohio estate tax -- often called "inheritance tax" -- was repealed effective 2013. Recent funds for infrastructure costs have been limited to about $500,000 a year, mainly from gasoline taxes.
The 18-member task force spent about 300 hours conducting an analysis of revenue sources, capital improvement needs and expenditures, Cline said.
Task-force members were "drawn from all across the city" with a broad cross-section of experience, he said. During their study, they asked many questions and looked at several options.
One chart compared Powell's 0.75 percent income tax with rates of other central Ohio cities. Cities with a 2.5 percent tax are Columbus, Grandview Heights, Worthington and Upper Arlington. At 2 percent are New Albany, Grove City and Dublin. Delaware city is at 1.85 percent and Gahanna is at 1.5 percent.
Powell City Manager Steve Lutz said each of those cities with a 2.5 percent rate increased to that rate in the past eight years, after local government fund payments were cut.
Gahanna City Council on July 2 approved a November ballot issue to raise its income tax to 2.5 percent. If approved, 75 percent of the increase would be dedicated to infrastructure maintenance and capital improvements.
Following his prepared remarks, Cline noted some residents believe an Ohio State University medical facility planned on Home Road would increase income-tax revenue. He said that facility would take about 10 years to achieve full employment, and when it does income-tax revenue from its workers would total about $300,000 a year.
The proposed increase to 1.15 percent would generate an additional $2 million a year, task-force documents said.
Those documents also identify the recipients of local property taxes. Of each dollar paid in property taxes, Powell receives 4 cents. The Olentangy Local School District receives 74 cents; Delaware County 11 cents; Liberty Township 8 cents; Delaware Area Career Center 2 percent; and Delaware County District Library 1 cent.
Other charts compared Powell's spending to that of other municipalities.
Powell has fewer police per 1,000 residents than Bexley, Worthington, Grandview Heights and New Albany. Thirteen of 15 Powell city officials earn less than the average of nearby communities. Powell's city spending per capital is less than 10 other area cities.
City council will consider the task force's recommendation and has not indicated when such an issue might appear on the ballot.
The filing deadline for the November election is Aug. 8.