Gahanna residents who work outside of the city could see their income taxes go up if City Council members approve legislation to reduce some credits. Officials say they need more revenue to stem a budget shortfall.
“We have not changed our tax rates in 42 years and the cost of just running a city is exponentially more expensive,” says Gahanna Council president Brian Metzbower.
Last November, Gahanna voters narrowly turned down a measure that would have lowered income taxes for residents who work in other cities. More than 14,000 Gahanna residents work outside of their community.
Under the failed measure, city officials would have raised the tax credit from 83.3 percent to 100 percent for residents who work in other cities. Their income taxes in Gahanna would have dropped to 0.
About 16,000 Gahanna residents who work in the suburban city would have seen their income tax increase from 1.5 to 2.5 percent.
City officials estimated the income tax changes would have provided $9 million a year in new revenue. Their budget projects a $2.6 million shortfall this year.
“We have been basically cutting back on capital needs and things like infrastructure and things that are integral to running a city,” Metzbower says. “And this council no longer wants to just kick the can down the road.”
Metzbower says municipalities do not have much flexibility in raising revenues and must rely more on income taxes.
“I personally would love to see reform at the state level,” Metzbower says. “I think it’s a terrible tax code. I think it’s a terrible system.”
A final public hearing on the tax hike measure will happen next Monday. A vote on the measure is set for late March.
