Delaware City Council pauses decision on repeal of income-tax credit after residents urge retention

The Delaware City Council paused final action on an ordinance that would repeal the city's income-tax credit for residents who work outside the city, after multiple residents described the change's personal impact and council members signaled they needed more information before voting.

Several residents told the council the credit matters to long-term households and hybrid workers. "To us, being long term residents here makes us want to leave the city. This is a raw deal," said Brian McDonald, a 24-year resident, describing what he calculated would be about a $3,000 annual impact for his household if withholding rules change. Another resident, Scott McVicker, asked the council to "vote no" and said the credit affects roughly 80% of Delaware residents who work outside the city, urging council to heed voters' earlier levies and look for alternate revenue options.

Why it matters: The ordinance on the agenda (listed in the meeting as a third reading of an item repealing section 192.081 of the Delaware codified ordinances) would change how the city's income-tax credit applies to residents who work outside city limits. Council members said the issue touches tax fairness, capital needs such as roads and services, and broader development policy. Several members also signaled that prior levy votes and detailed budget data factor into their deliberations.

Council deliberations were mixed and procedural: the presiding officer said the mayor requested waiting until all council members were present before taking a final vote, and the council agreed to postpone final action. Council members spoke generally about the need to balance long-term capital needs with tax equity and economic development; at least one council member said repeatedly that repeal was not the right solution and that alternatives and more data are being explored. Another council member outlined a policy preference against repealing the credit while endorsing other policy shifts such as limiting certain residential tax-increment financing (TIF) deals and pursuing economic development to broaden the tax base.

Public comments and council remarks included several specific points of clarification: residents described household-level tax impacts and hybrid-work withholding scenarios; council members referenced prior levy proposals that would have adjusted both the tax rate and the credit percentage; and officials emphasized the city is examining options and awaiting updated revenue figures in the April filings. No final vote was taken on the ordinance during the meeting.

Next steps: The council left the ordinance on the agenda for a future meeting when all members can be present and when staff can supply updated fiscal information. Council members said they are working on a comprehensive set of options rather than a single quick change.

Sources: Public comments recorded at the meeting and council discussion as entered into the official meeting record.