The City of Delaware’s plan to return to the ballot with another income tax increase proposal is beginning to materialize as the Delaware City Council voted on Tuesday to approve a resolution declaring the necessity for a ballot measure and the particular increase it will ask citizens to support.
In the discussions leading up to Tuesday’s meeting, the council had pondered several structures with varying rate increases and credits for those working outside of Delaware. Ultimately, the council has elected to back an additional 0.45% which would increase Delaware’s income tax rate from 1.85% to 2.30%. The income tax credit would also increase from 50 to 65%.
Because the tax credit would also be increased, the city had made the proposed rate increase permanent should it be approved by residents. The March ballot measure, which was soundly defeated by residents, would have increased the income tax rate to 2.2% for a five-year period, allowing residents to see how the additional funds were being used by the city before deciding on renewal at the end of the cycle.
The action taken by the council with the resolution is not an official declaration of intent to go to the November ballot but rather a guide for City Manager Tom Homan to prepare legislation. An ordinance containing the official ballot language and the city’s intent to file it with the Delaware County Board of Elections is still needed and is expected to be introduced with a first reading at the next council meeting, which is scheduled for June 10.
Additional legislation stating the city’s intent to remove the tax credit entirely should the income tax increase proposal fail again is also expected to be introduced during the meeting.
Prior to the council’s vote, Director of Public Works Bill Ferrigno spoke about the crisis the city faces with its capital improvement needs if additional revenue isn’t identified soon.
“I’ve been sounding the alarms on roads for quite some time; I don’t have to repeat that. But also in the past couple of years, I’ve been really concerned about our ability to manage and maintain a five-year capital program that really reflects the needs of the city,” Ferrigno told the council. “We talk about the kind of nuclear condition where we get to the point where we’re somewhat paralyzed and can’t really do anything, and I think we’re there.”
Ferrigno noted all of the transportation projects included in the City of Delaware’s 2025-29 Capital Improvement Plan (CIP), which are projected to cost nearly $48 million. While $22.8 million in grant funding is anticipated to be available, and more than $8 million is anticipated to be available through the Parks and Utility funds and the State Highway Improvement and License Fee funds, that still leaves more than $16 million in General Fund revenue needed to support the projects.
“This is just a snapshot of some of the things I put together,” Ferrigno said. “These aren’t the actual numbers you’ll see in the CIP; there are other projects, too, that will fall on the list. I pulled these ones out because we talk about grant funding maybe being the answer. As you can see, grant funding is a little less than half, so we’re at the point now where we may be selective about even applying for future grants because we don’t have the local match money. Our local match money is typically going to be General Fund dollars. So we have $16.3 million in general revenue needed to support this five-year CIP, and we don’t have $16.3 million to fund all these initiatives.”
Ferrigno added that the $16.3 million funding gap doesn’t include the $22.3 million needed to address the growing backlog in local street paving, nor does it reflect improvements for the Justice Center, a possible downtown parking garage in the future, new park improvements, or any other facility improvements.
Reach Dillon Davis at 740-413-0904. Follow him on X @DillonDavis56.
