None of the candidates vying for a seat on Dublin City Council think Dublin's income tax should be reduced, but one thinks the city's 85-percent carryover should be used differently.
None of the candidates vying for a seat on Dublin City Council think Dublin’s income tax should be reduced, but one thinks the city’s 85-percent carryover should be used differently.
City staff members recently reported that as of the third financial quarter, Dublin had an 85-percent carryover.
Candidates on the Nov. 8 ballot for Dublin City Council are Marilee Chinnici-Zuercher, Richard Gerber, Michael Keenan and Kevin Walter, and all agree the income-tax rate in Dublin shouldn’t change.
Walter said he believes the excess funds should be used differently.
A city goal is to carry a year-end cash balance of at least 50 percent, and that has been rising in recent years. The lion’s share of Dublin’s revenue comes from the city’s income tax, which is 2 percent.
In 2008, Dublin brought in $70.2 million in income-tax revenues. In 2009, income-tax revenues decreased for the first time to $65.9 million. Income-tax collections rebounded to $68.8 million in 2010. As of the end of September, income-tax receipts totaled $54.8 million.
The newcomer to the Dublin City Council race said the carryover should be used more effectively.
“The flexibility provided by the balance allows Dublin to remain healthy and able to do many of the initiatives that can help maintain our economic viability,” Walter said. “However, Dublin also maintains a large long-term debt load of $59 million as of December 2010.”
According to Walter, the city’s debt should be paid down with the carryover funds.
“Dublin should maintain a strong carryover balance but should allocate a larger portion to pay down debt faster,” Walter said. “(An) 85.3-percent carryover balance is excessive. By paying down long-term debt, Dublin maintains the ability to take on debt in the future should it be required. This ability gives Dublin just as much flexibility as cash maintaining a cash balance. But paying down debt now reduces our interest expense, providing an increased capacity to provide services. Dublin needs to put the carryover balance to work for the city, especially given the current weak performance of the city’s investment portfolio.”
Keenan, who has served as the chair of Dublin’s finance committee, said the city “historically” has maintained a carryover balance of 50 to 60 percent.
“Since the economy has declined in the last few years, we placed several large capital infrastructure projects on hold, which limited the amount of inter-budget transfers, creating a higher-than-normal balance,” he said. “We placed a moratorium on nonunion payroll in 2010 and worked hard to be very prudent with our expenditures. There has been a great deal of uncertainty with respect to tax collections from our large base of corporate residents, and the state budget tax revenues for local government have been significantly cut.”
With several big projects, such as the Bridge Street corridor plan and Interstate 270-U.S. Route 33 interchange redesign coming, Keenan said, additional money is needed.
“Finally, your current city council has kept the income-tax rate at 2 percent while other communities in our area, including Columbus, have increased their income-tax collection rate to 2.5 percent,” he said. “Increasing Dublin’s tax rate was never considered an option by our current city council.”
According to Gerber, the carryover balance is an “example of the city’s excellent management of the taxpayers’ money and represents to bond-rating companies and the financial markets our ability to meet future operational requirements, maintenance and upgrade of infrastructure, (such as) water, sewer and roadways, provide top-level services to residents and fulfill expectations associated with anticipated growth without having to raise taxes in the years to come.”
While other central Ohio communities have raised income-tax rates to operate, Gerber said, the high carryover means Dublin could operate in unforeseen circumstances.
“If we didn’t have a purpose for the funds, then a rollback would be proper, but maintaining a proper reserve ensures Dublin residents continued high level of quality services, and Dublin as a premier city and leading economic force in central Ohio,” he said.
Chinnici-Zuercher agreed that a reduction in income tax is not necessary.
“We have been very fortunate to have attracted and engaged people in our community that set the standard high for financial sustainability through having the appropriate balance of commercial and residential development,” she said. “Through the foresight of previous leadership, the implementation of our 2-percent income tax has helped to secure our future.
“This planning has resulted in the city securing sufficient funds to build the necessary infrastructure to meet the needs of our residents, build a comprehensive parks, open space and recreational program, build safety services that provide security to our residents and to take advantage of opportunities when they came our way,” she said. “As our community ages and expands, the cost to maintain these high services and stay competitive will be higher. Our carryover balance will be needed to meet that demand.”