On May 4, Powell residents will have their say on the city’s proposed tax rate increase, which would restructure the city’s tax rates for the first time in 31 years. Ahead of the vote, city officials and members of Powell City Council held a virtual town hall meeting Tuesday to discuss the ballot measure and to answer residents’ questions.
Proposed is an increase to the city’s income tax rate from 0.75% to 2%, as well as an increase of the tax credit residents receive for working outside of Powell to 100%. As it stands now, 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’ 2.5% rate.
“This income tax restructuring is an important measure,” Mayor Frank Bertone said at the start of the meeting. “It’s an investment in Powell, it’s an investment in your future. On May 4, this measure will be up for your voice to be heard and providing us the opportunity to restructure the income taxes but yet improve the quality of life we love so much here in Powell.”
Past attempts by the city to garner support at the ballot for a tax increase have proven to be unsuccessful, the most recent of those attempts coming in 2018. Of the 6,484 votes that were cast on the 2018 measure, over 59% were against the increase. The lack of a substantial tax credit for residents working outside of Powell factored heavily into the measure’s failure.
Bertone said the restructuring of the income tax will affect “three primary audiences,” which include those residents who live in the city but work elsewhere, those who both live and work in the city, and retirees. For those working outside of Powell, Bertone said the full tax credit would vastly simplify residents’ filing processes with the Regional Income Tax Agency (RITA).
Approximately $3.4 million in revenue would be generated for the city if the measure were to pass. Bertone said the revenue would be used for public safety improvements, economic development opportunities, and future infrastructure needs. Bertone pointed out that future infrastructure needs may not mean the same to all Powell residents, with neighborhoods in the southern parts of the city being older than other parts of the city.
“When you see a street that may need paved, like some of the streets on the south end, it may not resonate with everybody,” Bertone said. “But overall, folks, what we’ve relied upon in terms of income over the years has shifted greatly. 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.”
City Manager Andrew White said he felt the current proposal addresses the issues the city “fell short upon” with past attempts to modify the tax structure, particularly thanks to the city’s investment in residents’ perspectives as they went about restructuring the new proposal.
“What I’m so impressed about with the city of Powell, looking back and looking ahead, we’ve invested a lot in your perspectives as a community,” White said. “The Community Attitude Survey has clearly provided us direction that Powell wants to be a community of choice, and this tax proposal is a statement of investment in the city and investment in the future.”
White called the city “a business entity,” and like any business entity, “it’s a competitive field.” He added that given the resources that are provided to the city, the current tax rate and funds generated to provide those resources is not sufficient. For residents wondering where their property tax dollars are going, White said just 2.5% of every dollar goes to the city.
Another important factor in restructuring the tax rates in the city is to keep funds in Powell that are currently being invested in other cities. 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.”
Addressing a question about how residents can calculate the tax impact they will see with the proposed changes, Bertone said there is a calculator on the city’s website where residents can determine whether they will see a positive or negative impact to their taxes. The calculator can be accessed at www.cityofpowell.us/test-2021-tax-calculator/.
In closing, Bertone said the tax restructuring “has been a long time coming,” adding that “the time is now.”
“This is your opportunity to let your voices be heard on this unique opportunity to, obviously, maintain and improve the quality of life in which we so enjoy here,” Bertone said.
The entirety of the town hall meeting can be viewed by visiting the city of Powell’s Facebook page.
Reach Dillon Davis at 740-413-0904. Follow him on Twitter @DillonDavis56.