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Opposing Sides Debate Income Tax Hike
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With the August 4th vote on the income tax increase less than three weeks away, the Columbus Metropolitan Club held a debate today on whether the city really needs a rate increase.
The proposed hike would increase the city’s income tax from 2% to 2.5% percent, and raise $100 million a year for city government. Columbus currently faces an estimated $115 million budget deficit.
Republican opponent Terry Casey attacked the oft-quoted fact that Columbus’ last rate hike was in 1983. He pointed out city revenue has grown over the last 27 years.
“So however you add it up, whether you include the population growth, you include the inflationary factor, City Hall has had a four-fold increase in revenue while population has been a fraction of that and inflation has been a fraction of that,” said Casey.
Citing the a report by the city’s economic advisory committee, the so-called Howarth report, City Councilman Andrew Ginther countered a lack of revenue is the problem. He said the city government has already made difficult decisions.
“There are no new recruit classes for police or fire this year. There’s been a reduction in yard waste collection. We’ve closed 11 recreation centers and several pools. We’ve cut neighborhood health centers for the most vulnerable. There’s been more than 300 layoffs and unfilled positions,” said Ginther.
Casey moved on to question why the city designates 25 cents out of every income tax dollar to capital projects. While he did not question their general value to improving Columbus, he did question a lack of flexibility in their funding.
“The thing that’s a little difficult and a little arbitrary is to say it must be exactly 25%. Because there’s times in good times when maybe you can spend 30% on capital projects, other times you need to adjust it to 20%,” said Casey.
Ginther argued that the capital projects have been vital to city’s economic development and mostly subsidized by private investment – NOT city dollars.
“For every dollar that has gone into this, the city has provided 15 cents of that dollar invested in these downtown projects. And downtown drives the economy of Columbus and it drives the economy of this region. It is critically important, and we’ve got to stay focused on it,” said Ginther.
The debate also touched on whether the income tax hike should only be temporary. Casey said he would be much more likely to support a temporary hike because it would hold city government accountable for its actions.
“Then you get a chance to see all these promises – have they kept the promises? If we give them a tax, a blank check, permanent, forever, just for the next ten years alone, that’s going to add a billion one, a billion two to city hall’s coffers,” said Casey.
But Ginther insisted a permanent income tax increase IS necessary. He said anything less would be politically dishonest, merely putting the problem off for another few years.
“It would be a great political gimmick, wouldn’t it? If I came to you and said that, Hey, you know, I’m going to raise your income tax by half a percent. And I promise you that as soon as things get better, I’ll cut your taxes.” But then what kind of position would that put us in years later, when I’m back to you asking for another tax increase?” said Ginther.
If the tax increase passes, it would cost taxpayers $50 per year for each $10,000 they make.