Gahanna City Council has approved a contingency plan to raise additional funds should a proposed income-tax rate increase fail on the May 7 ballot.
During a special meeting Friday, April 5, council approved legislation that would reduce its income-tax credit if voters reject Issue 12.
On the ballot is a proposed income-tax rate increase from 1.5% to 2.5% and an increase in the tax credit from 83.33% to 100% for those who pay municipal taxes elsewhere.
The seven-member council unanimously approved legislation Friday that states the city would provide a 50% 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 another municipality.
This legislation would be nullified by Issue 12’s passage.
The legislation details how proceeds collected from tax-credit reduction and eventual elimination would be spent.
For example, 55% would be dedicated for the purposes of capital improvements and equipment for infrastructure, public safety, municipal facilities or parks and recreation, maintenance and repair of the same and paying debt service for such purposes.
The other 45% would be dedicated for the purposes of funding operations for public safety, municipal safety, municipal services or parks and recreation.
Councilman Brian Larick said the change to a 50% credit for six months would generate roughly $2 million.
If no credit is given, it’s estimated to generate about $8 million annually, he said.
If approved, Issue 12 is estimated to generate about $9 million annually once it’s fully implemented and assuming 100% compliance, said Michael Schnetzer, council member.
Then 75% of the revenue generated 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.
Gahanna resident Greg Saul asked council to delay the vote regarding the tax credit, saying it would be clear after the election what measures need to be taken.
Council member Karen Angelou said council wants to be truthful about the consequences of the ballot measure’s outcome.
“We wouldn’t ask for money if isn’t necessary,” she said. “That’s against my ethics.”
She said Gahanna needs additional funds for the city to grow and remain “a shining star.”
“I know the only way to do that is pass Issue 12,” Angelou said.
Read the full story in the April 11 edition of ThisWeek Rocky Fork Enterprise.