Marysville officials are discussing the impacts of a commuter tax credit as well as the addition of a license plate fee.
At a recent meeting of the council finance committee, finance director Justin Nahvi discussed a credit for Marysville residents who work outside the city.
He said that if the city were to apply a .5% income tax credit, it would reduce the amount of income tax the city collects by about $1.277 million. A quarter of a percent credit would reduce income tax collection by more than $638,000.
“There was a reason why the tax credit was taken away years ago,” said City Income Tax Administrator Jackie Ward.
She said about half of city residents would be able to take advantage of a tax credit. Ward said she uses a “slim staff” but each tax return is manually checked. She said a credit would be difficult for her staff and would, “increase the number of errors we see.”
Nahvi said he was not looking for any type of answers from the finance committee, but he did want to give members an update. He said that several years ago, council agreed to conduct a three-year analysis and review the option of a credit. Nahvi said 2019 represents the second of the three years.
Columbus, Dublin, Gahanna, Reynoldsburg, Upper Arlington and Delaware offer some sort of commuter credit. Officials also said there’s some concern that the Ohio Legislature is going to pass a bill requiring municipalities to provide some sort of commuter tax credit. Nahvi has said because of this, some cities have opted to get rid of their own commuter tax credits.
Council member Nevin Taylor, who sits on the Finance Committee, suggested, “maybe take this to the voters and let them decide.”
He said he is “very worried” about where the city would make up that money if a credit were given.
Nahvi said that even if the city increased the income tax to 2% and offered the credit, the city would see less revenue.
“Where would we cut back?” Taylor asked.
Nahvi explained that capital expenses for streets will go down beginning next year because the city is the finishing up its largest projects.
“So moving forward, it’s just paving,” Nahvi said.
He said the lower capital need, combined with this year’s increase in the state gas tax along with a potential increase in the permissive license plate fee should close the gap caused by the lost revenue.
The license plate fee increase was discussed earlier in the meeting. In November, the county passed legislation to add three, additional $5 fees, totaling $15 per vehicle, to vehicle registration.
Taylor said the city began looking at increasing the license fees, “now that we see the county is using it.”
Marysville has the option to add a pair of $5 fees.
According to the Ohio Department of Motor Vehicles, for December, Marysville has 23,078 registered vehicles. Nahvi said that based on those numbers, if the city raised the license fee by $5 per vehicles, the increase would generate about $115,000 annually for the city. He said that would be combined with the about $58,000 the county must give the city because of its increase.
“That money would be allocated strictly to street maintenance or paving streets,” Nahvi said.
Council member Henk Berbee, who sits on the finance committee, said that since he came onto council, the city has added many more miles of roads, but not increased staff size to care for those roads.
“Sooner or later, you come to a boiling point,” Berbee said.
He said street maintenance “continues to be high on the finance committee priorities.”
He explained that each year, as the finance committee begins to prepare the city budget, “the first thing we look at is what money is available for street pavement.”
He said streets often get only the money that is “left over.”
“Proper streets will maintain property value,” Berbee said.
Officials said a license fee increase taxes people that use the roads.
City Law Director Tim Aslaner said that if the city doesn’t enact the fees, the county could take at least one of them.
Berbee said that while the current commissioners have said they do not intend to increase the fees again, a different group of commissioners could change their mind.
Before the group adjourned, Taylor said he wanted to address several comments he has received about water rates. He said the city has not raised water rates.
Taylor said he has received several comments from people who receive their water bills from a landlord. He said the landlord is increasing the fees, not the city. Nahvi reassured Taylor the city does not plan to increase water rates for at least five years.