Next month, Delaware residents will again have the final say on the City’s proposed income tax increase to support infrastructure improvements throughout the community.
Residents soundly turned away a levy in March that would have increased the income tax rate to 2.2% for five years, allowing residents to see how the City used the additional funds before deciding on renewal at the end of the cycle. Following the levy’s defeat, the City went back to work tweaking the proposal with an eye toward the November ballot.
After months of deliberation that weighed what the City needed from a levy and what it felt had the best chance for success, the ballot language was approved for submission to the Delaware County Board of Elections in July. The proposal approved by the Delaware City Council includes an increase of 0.45%, which would move Delaware’s income tax rate from 1.85% to 2.30%.
As part of the levy, the income tax credit for those working outside of Delaware would also increase from 50 to 65%.
If passed, the levy would generate an additional $7.6 million to fund improvements to the city’s infrastructure. Along with the existing levy and current capital, the City would have approximately $9.5 million in total available. At the July 8 council meeting, Director of Management, Budget, and Procurement Alycia Ballone proposed allocating $5.3 million for street maintenance and repairs and $4.2 million for capital improvements.
Under Ballone’s allocation proposal, the City would target 10 miles of roadway paved each year. Through the first five years, the City would focus primarily on the backlog of streets rated in poor or critical condition. Ballone also noted the additional funding would allow the City to apply for grants it may not be able to currently seek due to the lack of local funding required to match the grant amount.
Should the City’s second attempt fail, the possibility of taking matters into its own hands has been floated throughout the process by eliminating the credit received by those working outside of Delaware. If the credit is eliminated, the City estimates an additional $6.7 million would be generated.
“Issue 3 will allow the City to significantly accelerate street repairs, improving over 50 miles of neighborhood roads within six years,” City Manager Paul Brake said in a letter to residents. “Without this increase, limited funding will primarily focus on major roads, leaving many neighborhood streets in need of repair.”
Brake added, “Consequently, if Issue 3 fails, City Council has indicated its intention to eliminate the tax credit to help close the funding gap necessary to responsibly manage city operations. While this is not the preferred outcome, it ensures we can maintain roads and infrastructure at the level our community expects and deserves.”
Brake reminded residents that the city is primarily funded through its income tax and not property taxes, which are assessed and collected by the county and largely support schools and other property tax-dependent agencies. He also noted that Social Security, disability benefits, military compensation, unemployment benefits, and retirement pensions are not taxed as earned income and would not be impacted by the levy.
For more information on the levy, visit www.delawareohio.net/issue3.
Reach Dillon Davis at 740-413-0904. Follow him on X @DillonDavis56.
