Gahanna City Council members spent about an hour Monday, April 1 debating legislation they hope they won't need regarding credit for income taxes paid to another municipality.
After much discussion, council decided to postpone voting on the legislation until 6:30 p.m. Friday, April 5, in an effort to give council member Brian Larick time to work with city attorney Shane Ewald to create what Larick called “high-quality legislation.”
Larick said he wants the language and structure written to reflect language similar to Issue 12.
Issue 12 on the May 7 ballot is a proposed income tax-rate increase, changing the city’s rate from 1.5 to 2.5 percent, and increasing the tax credit from 83.33 to 100 percent for those who pay municipal taxes elsewhere.
If approved, 75 percent of the revenue resulting from the increase would be dedicated for capital improvements and equipment for infrastructure, public safety, municipal facilities or parks and recreation, to include but not be limited to streets, buildings, parks facilities, trails and playground elements, maintenance and repair of the equipment and paying debt service for such purposes.
The other 25 percent would fund operations for public safety, public service or parks and recreation to include but not be limited to police protection, 911 emergency services, snow removal, streetlight and traffic-signal maintenance and recreation programs.
On the table Monday night was legislation stating the city would provide a 50 percent credit applied to the lesser of the tax paid to another municipality or the tax imposed by the city for the period beginning July 1 and ending Dec. 31. As of Jan. 1, 2020, no credit would be allowed for income taxes paid or withheld by an employer for payment to a municipality other than Gahanna.
If voters approve Issue 12, the legislation being considered for an April 5 vote would be negated. In simple terms, it's a backup plan in case voters reject Issue 12.
If legislation is approved that would provide the 50 percent credit for six months, Larick said, it would generate roughly $2 million. If no credit is given, it’s estimated to generate about $8 million annually, he said.
“The way it (legislation) was initially drafted is an open fund,” Larick said. “All funding would go to the general fund. While those funds, I’m confident council would use those funds diligently, at the same time, we have a structure written for Issue 12 that I think is a good structure. …
“The intent is to redraft this so the dollars go to similar funds and in similar ways as Issue 12 in the off chance that Issue 12 doesn’t pass,” he added.