New Carlisle residents seek income tax relief, city rejects petition

By the numbers:

$1 million — New Carlisle’s annual income tax revenue

1.5 percent — Current income tax rate for New Carlisle residents, regardless of if they work in or out of the city

176 — Residents who signed petition to put tax credit issue on the ballot

A group of New Carlisle residents want to receive credit on their local income taxes when they pay taxes in other cities, but legal hurdles might prevent the issue from being on the November ballot.

A petition signed by 176 New Carlisle residents asks that the council put on the ballot an ordinance giving residents who work in other cities credit for the income taxes they pay to those towns.

New Carlisle’s income tax is 1.5 percent. If a city resident worked in Dayton, where the income tax rate is 2.25 percent, they currently have to pay both.

“It’s something that has bothered me for a long time,” said Kelli Bartlett, who organized the petition.

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If voters approved the credit, a New Carlisle resident who works in Dayton wouldn’t owe New Carlisle any income taxes.

City leaders oppose the change, saying it would devastate the budget and lead to either tax hikes or deep cuts to services.

The petition needed 142 valid signatures to get on the ballot, according to the Clark County Board of Elections. More than 150 of the signatures were valid, records show.

But the city wasn’t able to validate the petition, Clerk of Council Gene Collier said in a letter to Bartlett, because it was submitted past deadline and contains language that violates Ohio law.

‘It’s getting to be a bit much’

Bartlett began collecting signatures for the tax credits in June.

“Most cities do give an income tax credit to their residents,” she said.

She found that many of her neighbors agreed with her, she said, or wanted to learn more about the issue. Bartlett works in Dayton, she said, so she ends up paying 3.75 percent in income tax each year.

“It’s always a bit difficult at the end of the year,” she said.

She wants residents to at least have the option to vote on the issue.

Joan Sanborn signed the petition, but isn’t completely sold on the idea.

“I’m still trying to get it straight in my own mind,” she said.

Sanborn isn’t personally affected by having to pay income taxes to more than one city, she said, but she can sympathize.

“Depending on what your income is,” she said, “I can understand that it’s difficult.”

‘Devastating’ Consequences

While it’s unlikely the tax credits will be put to a vote this November, city leaders say if it passed in the future, it would be devastating for city services.

A large number of New Carlisle residents work outside of the city, City Manager Randy Bridge said.

The city brought in about $1 million in income tax revenue last year and is projected to bring in the same this year. The credits would take a big chunk out of that revenue, he said, although the city hasn’t calculated the exact numbers.

New Carlisle would either have to raise income tax rates or drastically cut services, Bridge and some city council members said.

“This would be a gigantic step back,” Bridge said. “The first that’s going to go is probably police.”

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The city would have to consider dissolving into a nearby township, Council Member Ethan Reynolds said.

“This is a terrible idea,” Reynolds said.

To combat a loss of services, both said tax rates would likely be increased.

“We would have to be creative in how to get our money back,” Bridge said. “We’d literally have to try to go up to 3 or 4 percent (in income tax rates).”

Reynolds, a fiscal conservative who has opposed higher taxes, said he understands the frustration of paying taxes to two cities. But, he said, a vote to pass these credits would essentially be a vote to raise taxes.

Bartlett argues other cities function while providing residents while offering credits.

“Other cities manage to do it,” she said.

Still Reynolds maintains there isn’t enough industry in New Carlisle to make that feasible.

Council Member Rick Lowrey said changes to income taxes should be made — but not in cities where residents live.

Workers should only pay taxes where they live, he said, because paying where they work is taxation without representation.

“Whoever came up with this law is ridiculous,” he said.

Statewide fight

The current system is needed to maintain services in cities across Ohio, said Kent Scarrett, executive director of the Ohio Municipal League.

In fact, many cities have begun to move away from offering any credits, he said, because of state funding cuts in the past few years.

“Many of them are going to the ballot to ask for higher taxes,” he said.

State lawmakers have considered a bill that would make it so residents only pay income taxes where they live — and another one that would require everyone to only pay where they work, he said

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Both could have devastating affects on cities, he said.

“It’s a dangerous model to start talking about, ‘Well, we’re just going to cut (budgets) in half,’” Scarrett said.

Should the issue ever make it on the ballot, Bridge said, New Carlisle would launch a counter campaign.

“If they can’t get it on this time, it doesn’t mean they can’t retry,” he said. “We can’t let this happen.”

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