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City income tax credit? Not now, officials decide

By JOY BROWN
STAFF WRITER

Findlay residents who work outside the city won’t be receiving a municipal income tax credit anytime soon.

On Tuesday, City Council informally discussed the tax credit idea at 1st Ward Councilwoman Holly Frische’s request, but some council members dismissed the idea as fiscally risky and fundamentally unfair.

“If we see a (healthy economic) trend four or five years down the road, then maybe we can have this conversation again,” said 3rd Ward Councilman Ron Monday.

“My basic question is still, why would we ever want to do this?” asked Randy Van Dyne, 2nd Ward councilman.

Offering a credit for Findlay residents who work outside of the city, and pay another city’s income tax, began in 1967 when Findlay’s 1 percent income tax collection started. Residents were offered a full credit until 1979. The credit then fluctuated between a half-percent and 1 percent, depending on the city’s budget situation, said Andrew Thomas, Findlay’s income tax administrator.

In 2009, the half-percent credit became a casualty of the Great Recession, as officials scrimped and saved where they could.

In 2008, the last year the credit was in effect, 2,345 households took advantage of it, Thomas said, costing the city $452,000 in revenue.

In 2013, the credit would have resulted in the city’s tax collection being reduced by $567,617, he said.
During Tuesday’s discussion, it was noted that several other Ohio municipalities, large and small, offer some level of tax credit for residents who work elsewhere, but many of those towns have higher tax rates that can offset the reduced funding.

“Even if everybody else is doing it, that’s not a reason for us to do it, too,” Van Dyne said. “It’s not that expensive to live in this community, frankly.”

“Why are there 2,000 people who would be eligible for this credit who are choosing to live in Findlay instead of the city where they work? Because of the quality of life” in Findlay and the services the city offers, Monday said. “I believe each person should pay their fair share to get things (government services) done.”

Monday said no one should have to pay any less or any more than their neighbor.

“My wife works in Defiance … and she’s paying the full tax rate in the city of Findlay,” said 5th Ward Councilman John Harrington. “When the city repealed that credit, I was a little upset about it, but I’ve learned to live with it because of all the street paving, waterline work, fire protection and other services.”

Frische said she is not taking a position, but thought it merited discussion because constituents have asked her and another council member about it.

When asked for his input, Auditor Jim Staschiak pointed out the following:

• The administration’s five-year capital improvements plan calls for an increase in spending each year, which must come from income tax collections.
• State legislation may mandate such credits anyway.
• Findlay’s business income tax collection can have large fluctuations from year to year, having an impact on the overall tax collection.
• The city doesn’t know what its operational costs will be three or more years down the road.

“There is not enough information to know if … you could afford it,” Staschiak said.
Mayor Lydia Mihalik agreed.

“I think this conversation may be premature,” she said. She advocated waiting at least until next year to revisit the idea. By then, the city hopes to see the economy “leveled out,” she said.

“It’s a lot easier when you have some steady improvements in the economy as opposed to the blips we’ve seen in the past two years,” she said. “And just because the city is on better financial footing this year doesn’t necessarily mean it doesn’t need the $576,000 to provide the services that it does.”

Brown: 419-427-8496
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Twitter: @CourierJoy

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