Powell voters have spoken regarding a proposed reconfiguring of the city’s income tax structure. On Tuesday, the community showed considerable support for the special election ballot measure, approving it with 66% of the 1,774 total votes cast.
With the approval, Powell’s city income tax rate will change for the first time in 31 years, increasing from 0.75% to 2%, while also increasing the credit given for taxes paid to other municipalities from 0.25% to 100%. The new rates will begin being collected on Jan. 1, 2022.
“The next chapter for Powell begins today,” said Mayor Frank Bertone on Tuesday evening. “Tonight, Powell citizens showed up and agreed that our city deserves to keep improving to provide the high quality of life for everyone that lives here.”
City Manager Andrew White said, “We’re thrilled that our community made their voices heard and agreed that Powell is worth investing in. With the tax restructuring plan, we can put this money back into public safety, our infrastructure, and to support our local businesses. The additional revenue will help keep the small-town charm that our citizens have come to love about Powell.”
Powell City Council voted to approve the ballot measure on Jan. 19 after considerable discussion on why the increase is needed and what would need to be included in the measure in order for it to gain the support of the community. The city’s most recent attempt to restructure the income tax rate failed considerably in 2018, in large part due to the inadequate credit increase for those who worked outside of the city.
As it currently stands, Powell’s income tax serves as the lowest in central Ohio and one of the lowest in the state. Currently, residents who find their work outside of Powell receive a tax credit of 0.25%. For those working in Columbus, that means the total tax hit to their income is 3% given Columbus’ own 2.5% rate.
In January, White said the proposed changes to the rates are geared towards a more “fair” structure for all in the city, pointing out the existing gap in taxes paid for those working in Powell compared to those who find their work outside of the city.
“At the low end, we have tax filers who are responsible for 0.5% of total income taxes paid to the city,” White said. “We have folks who are paying 0.75%. And then for those individuals who are paying a combined rate, it’s as high as 3%. So, rates of 0.5% to 3% is fairly volatile.”
Approximately $3.4 million in revenue is expected to be generated for the city as a result of the changes. During a town hall meeting with residents last month, Bertone highlighted the need for additional revenue that would be used for public safety improvements, economic development opportunities, and future infrastructure needs.
“Overall, folks, what we’ve relied upon in terms of income over the years has shifted greatly,” Bertone said. “In the 90s to early 2000s, when the city was growing at a rapid pace, we had ample receipts of development fees. Those times, we’ve seen a recession to that point, and now we’re obviously looking for opportunities to take on those costs that have been incurred over those years and share those expenses back amongst the community.”
During the town hall, White said $2.8 million in tax dollars are leaving Powell every year to cities with higher income tax rates and tax credits. Under the new proposal, White said the $9.2 million that is currently generated in Powell will increase to $9.8 million, while also keeping the $2.8 million in the city that would otherwise leave.
“That provides a great amount of resource allocation to maintain public safety, our services, community amenities, but also to look at those sought-after infrastructure projects and to be competitive in the field of economic development,” White said. “Central Ohio is one of the most competitive areas in the entire nation, and we are surrounded by 27 other communities that have two-times greater the resources with which to attract and retain businesses.”