Last night the income tax issue was on council’s agenda for the first reading and after much political posturing and debate the issue died 3-3. Therefore as it stands now there will not be an income tax issue on the November ballot.
However a special finance committee meeting was called for 6/11 so who knows what will happen next. I guess we’re supposed to accomplish in 1 meeting what we couldn’t accomplish in weeks of debate during the Finance Income subcommittee and Finance committee meetings.
I wish I did, but I don’t know what comes next other than to plan for deep cuts to be able to meet our basic financial obligations. I would have preferred the voters make the decision about whether they would support the income tax increase, or if not, thereby supporting cuts in our general fund category. However it appears council didn’t have the backbone to allow the voters to make that decision.
- Brian
Brian,
Clarify the impact on those of us who pay the 2% for the priviledge of working in Columbus. Would we see a reduction, or would the credit be adjusted so we see no increase?
Thanks
Comment by Tony Barletta — June 6, 2008 @ 11:07 am
The proposal put forth was anyone who pays income taxes to another municipality, outside of Pickerington, the credit would be raised to 1.5%. Therefore if you pay 2% to Columbus, or whomever, you would not pay any additional taxes. You would still pay the .5% you already pay to Pickerington.
However, this concept was not endorsed by all members of council but it was supported by the vast majority.
- Brian
Comment by pickerington — June 6, 2008 @ 11:58 am
Brian
I was surprised that council found themselves in a deadlock the other night. I had the impression that council had come together and that they were putting aside their differences on the issue and “taking one for the team”. Apparently I was wrong.
One issue that hasn’t been mentioned so far is the crime rates related to the increase in commercial development. If you review the total number of crime reports in 2003 (pre-Kohl’s) and those same crime numbers for 2005 you will find they increased two and half times increases. As I recall the numbers in 2003 we had around 350 crimes reported and that number jumped to the 850 range. Clearly increasing the income tax would require those requiring the services to pay for those increased services. Our Police Chief has said more than once that most of the police calls are in the 256 corridor and they have increase dramatically since 2003.
As I understand what was proposed and what was shot down was to increase the current 1% income tax to 2% with no mention of the amount of credit.
In a separate city ordinance the council would retain the right to adjust the credits if any to the city tax payers workers working in another city paying taxes to that city. What was on the agenda was an ordinance to give a 75% (1.5% on income) credit to those that earn monies in other cities and paid taxes to those cities. Those that currently work in say Columbus and pay them 2% of their income wouldn’t pay anymore than they do now. That is .5% to Pickerington and 2% to Columbus or a total of 2.5% for local taxes.
I do have some sympathy to those that are concerned about the credit. I also know that the city’s financial advisor is very conservative and wants to make sure there is enough money in the city coffers to pay the bills. However I believe using the same numbers that the city needs in round figures around $1 Million each year to maintain services. I also believe that a 2% income tax with a 100% for money earned in another city would provide the $1.7 Million. I believe what is being proposed will actually generate $3 Million in new revenues.
So here is the question would he council consider adjusting the credit to keep additional revenues under say the $2 million mark? Clearly I believe that many in the community would resist sending our tax dollars to the city just to see it put in the bank or allow the council members to go a sending spree. In fact I have heard concern by the voters that they didn’t want to see the city council adjust the credit at will. With that said I am sure language in the credit ordinance could be amended to reflect a willingness to allow the taxpayers to keep any excess monies that might be generated from a 75% credit. That could be easily done with a rebate check the following year.
Finally; I wanted to thank you Brian for mentioning that we were talking about this income tax increase in 2006. I was called some nasty names when I mentioned it before. It was also stated that these talks never happened. They did occur.
Comment by Ted Hackworth — June 6, 2008 @ 1:04 pm
Ted, I can without a doubt say you are not the only one who was surprised by what happened the other night. This exact same piece of legislation made it out of Finance committee meeting with a vote of 5-1 (Keith was out of town otherwise I believe it would have been 6-1). Then it got shot down in council meeting 3-3 (Keith was still traveling).
However, we do have pretty accurate figures of where we’re receiving our income from and while I don’t have that in front of me in 2007 we received about $1.7M from businesses in the City (those paying 1%). So if we double that to 2% we’ll increase what is collected from businesses to $3.4M or a $1.7M increase. We’re not going to be swimming in $ with this tax increase. However, it is enough to pay our debt, pay for Diley road, reinstate street paving and pay for some smaller CIP items.
If those paying taxes elsewhere still pay the exact same amount .5% (credit goes to 1.5%) then we’re not collecting extra from them so that figure stays the same. If I can get an electronic copy of the spreadsheet Linda Fersch put together I’ll try and post it out here for review.
Now about the credit. The credit has not been touched in 32 years! In 1979 the city almost defaulted on a loan for the water plant? or some other loan and they didn’t touch the credit then. It hasn’t been touched since. When the ballot issue failed I was extremely upset by the antics of council and being accused of doing a wink-wink with this credit so I proved then it wasn’t going to be adjusted willy-nilly. After the issue failed I made a motion to change the credit from .5 to .25 – which in essence would generate nearly the same revenue as going from 1% to 2% with a 1.5% credit. My motion died without a second. Why – because NO ONE dared to touch the credit! Heck – I would have voted against my own motion but I was extremely MAD by the accusations of a council member trying to make this out to be something it was not.
The credit would only be adjusted to collect more revenue in the most extreme circumstances. I’m not sure what those circumstances would be but we haven’t hit that in 32 years so … If we ever do modify our credit I would like to see it go to 100%, meaning if you pay taxes somewhere else you wouldn’t pay Pickerington city taxes. However, this city was built as a bedroom community and while we’re working on trying to direct that towards commercial now vs residential that is a long term change and doesn’t occur overnight.
- Brian
Comment by pickerington — June 6, 2008 @ 1:52 pm
What is the plan now that the income tax issue failed? Given the lopsided outcome I can only guess a general anti-tax mentality took over as this increase would impact a small percentage of Pickerington residents. I think it is clear the city needs the money not only for necessities but to tackle more of its debt load.
Comment by Frank — November 12, 2008 @ 8:19 pm
We’re currently reviewing the budget and cutting some of the programs we had hoped to reinstate such as street paving. We’ll continue to have meetings about the budget initially and work to through the 2009 budget and then address where we go to from here regarding any further issues that may be brought forward.
- Brian
Comment by pickerington — November 13, 2008 @ 5:09 am