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Delaware City Council delays final vote on repeal of income-tax credit after extensive public comment
Summary
The Delaware City Council discussed Ordinance 24-1, which would repeal a tax credit for residents who work outside the city, heard public testimony about financial impacts, and agreed to defer a final vote until all council members are present.
The Delaware City Council on Jan. 27 discussed Ordinance 24-1, a proposal to repeal Section 192.081 of the Delaware codified ordinances that provides a tax credit for residents who work outside the city, but postponed a final decision until the full council can vote.
The matter drew public comment and extended discussion among council members about fiscal needs, fairness of the tax structure and alternatives to raising revenue. Vice Mayor Schaffer told the chamber the mayor had asked the council to wait until all members are present before making a final decision.
The ordinance, described at the meeting as a repeal of the tax credit in Section 192.081, has prompted messages to council from residents and generated debate over whether repealing the credit is the appropriate way to address the city’s budget and capital needs. Resident Brian McDonald said the repeal would have a tangible financial effect on his household, telling council it would “cost us about $3,000” because of changes in where his family’s income is taxed. Another resident, Scott McVicker, urged council to reject the ordinance and to maintain the tax credit for people who work outside Delaware.
Council members spoke at length but did not take a final vote. Several members said they do not regard repeal of the credit as a comprehensive solution to the city’s fiscal challenges and described work under way to consider alternatives. Council comments included calls for expanded economic development, changes to residential tax-increment financing (TIF) policies and exploring revenue options that do not disproportionately affect residents who live in Delaware but work elsewhere. One councilmember described the city as “incredibly efficient and runs extremely lean,” and urged focusing on economic development and changes to developer incentives rather than eliminating the credit.
City staff said updated tax revenue figures will be available with April filings and that city departments are examining alternative proposals. Finance Director Alicia (first name given at the meeting) answered procedural questions but did not present new revenue numbers during the Jan. 27 discussion.
Because the council did not take final action, the ordinance remains pending; the council indicated the issue will return for another reading when all members can participate. No implementation steps or effective dates for a repeal were adopted at the Jan. 27 meeting.
The debate occurred amid broader comments from council about municipal priorities, including capital needs for roads and services and proposals to change how residential development is subsidized. Several councilmembers urged the city to consider a package of policy changes — including limits on the duration of developer TIFs and greater emphasis on projects that bring high-paying, permanent jobs — as alternatives to a straight repeal.
Public comment on the ordinance at the Jan. 27 meeting consisted primarily of residents urging the council to keep the tax credit in place; the council recorded no votes on Ordinance 24-1 at this session and agreed to revisit the matter at a later meeting when all members can vote.
