Powell income tax: With issue approved, city begins planning process 'for 2022 and beyond'

Jim Fischer
ThisWeek

Work will begin in earnest as Powell city leaders prioritize the community’s needs that can be met with revenue from the income-tax measure approved by voters on the May 4 ballot.

The measure will raise the city’s income-tax rate from 0.75% to 2% but increase the credit for taxes paid in another municipality from 25% to 100%.

Powell Municipal Building

The issue is estimated to generate $3.4 million annually in revenue for the city.

The measure was approved 1,171 votes to 603 votes, or 66% to 34%, according to unofficial results from the Delaware County Board of Elections.

City Council approved a resolution Jan. 19 to place the issue before voters.

The tax collection will begin Jan. 1, 2022, but Mayor Frank Bertone said council and city staff don’t have to wait to begin deciding how the increased revenue could be put to use.

“We’re excited to begin the planning process for 2022 and beyond,” Bertone told ThisWeek. “We have a long list of needs within specific areas that require some quick attention. For example, paving efforts, curb repairs, park equipment and more.

“The city is currently working on a five-year capital-improvement project program,” he said. “We will work in partnership with our community to identify needs and prioritize those projects. The Adventure Park tunnel is certainly an item that will reach a high level of consideration based upon the public-safety needs.”

City Manager Andrew White told ThisWeek all city services stand to benefit from the increased revenue.

“With the tax restructuring plan, we can put this money back into public safety, our infrastructure and to support our local businesses,” White said. “The additional revenue will help keep the small-town charm that our citizens have come to love about Powell. This also equips our team to deliver high-quality services and amenities. In the 2021 Community Attitude Survey, one of the main reasons people love living in Powell are the amenities they receive.”

Bertone specifically mentioned the need to find ways to offer continued support to the city’s businesses community.

“We have conversations that need to happen with our business owners,” Bertone said. “This change will impact many of them. We are still in the midst of the pandemic, and many of them are working hard to return to pre-pandemic revenues.”

City leaders have called the measure a “restructuring,” saying about 80% of residents would benefit from the credit.

White said the income-tax rate has remained flat at 0.75% for 31 years, and Bertone called the measure a “critical component needed for our community to grow.”

Council member Tom Counts acknowledged that a portion of residents will see the full increase but said he thinks this be viewed “as a necessary piece of a much larger jigsaw puzzle that has long-term benefits to the city.”

Bertone said Powell residents who also work in Powell will see the full increase from 0.75% to 2%, but those who live in Powell and work elsewhere “stand to have a positive or neutral impact” on their income-tax bill. That’s due to the credit increase, meaning residents would pay income tax to Powell only if they are taxed below 2% in the municipality where they work.

Bertone said retirees who derive their income from Social Security or pensions would not see an increase because those are not taxed as earned income.

“This new tax restructuring will bring about parity,” Bertone said. “Notably, 80% of the funds raised will come from non-Powell residents who work in the city, and most residents will see a net savings or no change, due to the 100% credit.

“Increasing taxes is never an ideal topic for any community,” he said. “The city’s revenue issues have been well known and documented for a number of years. Over 31 years, the city staff, administration and City Council have been somewhat successful in managing the resources we have available.”

Counts said the measure will take advantage of recent growth in Powell’s business community.

“We have the opportunity to generate $2.7 million in revenue from nonresident workers,” Counts said. “That’s 80% of the new revenue that would come from the tax.”

Counts said the measure isn’t solely about shifting the tax burden onto nonresidents, though. Acknowledging that some would see their taxes increase, he said the city is overdue for improved revenue streams to support city services and maintain quality of life in Powell.

“I don’t think people moved here for the low income-tax rate. I think, like (my family did), people moved here because it’s safe, it’s well-maintained and it’s a community that is a wonderful place to raise a family and then stay in retirement,” Counts said.

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