City Council settles tax credit issue

Brock Harrington

After three weeks of arguing, Kent residents who work outside the city, nearly 60 percent of the population, won’t have to worry about paying more taxes come Jan. 1, 2009.

Kent City Council’s Finance Committee has decided to amend ordinance No. 2008-135 regarding the reduction of income tax credit for the second time in a month. The committee changed the five-year, 0.5 percent reduction in the Kent city income tax credit, and amended the ordinance to100 percent.

The motion was passed by all seven of the council members in attendance last night at the council chambers on South Depeyster Street.

The special committee meeting lasted less than 45 minutes, as council members, such as Ward 1 representative Garret Ferrara, had a clear picture of what needed to be done.

“I think that was the general consensus (to rescind the 0.5 percent tax credit reduction),” Ferrara said. “We took the tax credit down to 50 percent, as opposed to 100 percent. We it took it down by half, and we just replaced it. So it’s a wash.”

The decision to amend the ordinance is a costly one, according to Ward 3 representative Wayne Wilson, a 17-year veteran on the council. The money the 0.5 tax reduction could have brought, according to Wilson, would have been anywhere from $600,000 to $800,000.

Also on Sept. 17, council passed a 0.25 percent income tax increase for all Kent residents to be placed on the November 2009 ballot. All together, Wilson said the new taxes would bring around $2 million into the city.

Many residents came to the Sept. 17 Kent City Council meeting and asked representatives not to vote for the ordinance, but the tax credit reduction still passed 6-2. However, only a handful of Kent residents appeared at the meeting last night, which surprised Wilson.

Since then, a petition has been circulating around the city asking for a recall of seven council members in response to the tax credit reduction.

“I was contacted by some people who said, ‘Do not change anything at all, (and) leave it exactly the way it is,'” Wilson said. “(But) I also had people calling me and telling me. ‘Hey, wait a minute, if you’re going to do that, how ’bout doing it in 2010, the same time the voters would have made their decision. If (the voters) are going to do it, then I’ll be glad to do it.'”

After hearing from his ward, Wilson said his main goal was to move the tax start date of Jan.1, 2009, to Jan.1, 2010.

The tax reduction would only affect the individuals who live in Kent, but work outside city limits, which may have been the center of the problem. Some city residents, such as Gary Vierstra, felt the tax was unfair and needed to change.

“I was alarmed about the arbitrary nature of this (tax reduction),” Vierstra said. “You go down the line of houses and (say,) ‘You pay taxes, you don’t – ‘ all depending on who works where. I don’t think that’s fair, it’s ridiculous.”

The tax discussion has been waged in Kent City Council for nearly three years, Wilson said. In those years, the council sought advice from a Blue Ribbon Panel to learn how the city could make more money in order to make improvements to the city. The entire process was open to the public, Wilson said. The Blue Ribbon Panel recommended that changing the tax credit would help, so Wilson said the council decided to act.

“When we finally came out and said, ‘We’re ready to do something,’ then people have something they stick their teeth in and say, ‘I don’t like this,'” Wilson said. “Until (people) really know how it’s going to impact them, you don’t see them.”

The Blue Ribbon Panel recommended a 0.25 percent reduction in the tax credit, but that number was increased to 0.5 percent when the council acted.

“I think what we really felt was that to get the development that we needed within the city – before the bottom fell out in the stock market – we needed that money for economic development,” said Ward 2 representative Jack Amrhein.

Ferrara, Wilson and Amrhein requested the meeting earlier this week as a response to the national economic failures of the past month.

“That’s fair to say,” Ferrara said. “We’re concerned how (the tax) affects citizens’ wallets.

“I can’t speak for anybody else, but (there’s) also the issue of the appearance of fairness of who you are trying to tax, and also what kind of message you’re sending to those people you may want to attract to the town.”

Although the reduction in the tax credit has been removed from the ordinance, Amrhein said there is a chance the council may revive the credit at a smaller percentage and in better economic times.

Contact public affairs reporter Brock Harrington at [email protected].