Gahanna Divided Over First Proposed Income Tax Increase In Four Decades

Aug 6, 2018

Voters in Gahanna will decide in November whether to approve an income tax hike, putting the city's tax in line with Columbus but above other suburbs. City leaders say it's necessary because of a projected budget shortfall and delayed infrastructure projects, but the proposal has drawn the ire of local business owners.

At the Greystone Tattoo Company in Gahanna, owner Richard Cook says he was shocked to hear about the proposal. Cook, a Dublin resident, says he's not sure why now is a good time for an increase.

"I don’t really like increases of taxes at all, especially when this is my first business," Cook says. "This is brand new. So, I mean anything that’s going to hinder possibly any flourishment of that business is going to not be appreciated.”

Long-time Gahanna city council member Karen Angelou says this would be the first-ever tax hike since the city adopted an income tax 42 years ago.

If approved, the income tax would climb from 1.5 percent to 2.5 percent, the same rate as in Columbus, but higher than other suburbs like Dublin, Hilliard, Westerville, Grove City and Groveport.

Five years ago, a ballot measure to raise income taxes was rejected twice by Gahanna voters. Angelou says she opposed raising taxes then.

“In 2013, we had a situation that it was a bunch of wants, and now it’s a bunch of needs," Angelou says.

Since then, Angelou says, city officials have streamlined services and eliminated some positions. Even still, Gahanna Finance Director Joann Bury projects a $2.6 million budget shortfall next year.

Angelou says the money raised with this hike would pay for infrastructure and capital improvements.

“The 1 percent is about $9 million, and of that $9 million, 75 percent will go to infrastructure needs only, mostly roads, bridges," Angelou says.

 

Downtown Gahanna
Credit Debbie Holmes / WOSU

If voters approve the income tax hike, the tax bill would drop for Gahanna residents who work in Columbus and other cities with a 2.5 percent tax rate, because those residents would only pay income taxes in their work location. Right now, Gahanna charges residents who work in Columbus an extra 0.25 percent.

Troy Frazier, owner of Bicycle One in Gahanna, is mainly opposed to the size of the tax proposal.

“That is a rather large percentage; they’re almost doubling their income from city tax," Frazier says. "I would not suggest such a radical hike."

Gahanna's current rate of 1.5 percent is definitely on the low side for Central Ohio. While some communities like Plain City have rates as low as 1 percent, most are closer to 2 percent.

Powell appears to have the region’s lowest tax rate of 0.75 percent, although their city council is considering putting an increase on the fall ballot, as well.

Long-time Gahanna resident and realtor Amedeo Pagani says he supports the increase if it improves the city.

“I think it would really help," Pagani says. "Gahanna is a great area and to keep it maintained and looking good, I think it would help, if it’s allocated toward the right things.”

Pagani says he doesn’t think the hot real-estate market will cool because of an income tax hike.

“No, because I can see from time to time where more monies are needed for infrastructure," Pagani says. "I know they’ve done a couple of, when you go down Hamilton Road, they’ve done the roundabouts, I love those. I think those are great to keep the traffic flow going.”

Angelou says state cutbacks over the years depleted a funding source for local communities. 

“In that infrastructure, in capital improvements, it’s just a necessity," Angelou says. "It’s not a want, it’s a need."

If approved, the income tax hike would start in January of next year.