City of Gahanna Plans to Appeal Court Ruling of $13.2 Million It Must Pay to Class Members

Yesterday, the Court of Common Pleas announced a ruling in the LaBorde v. City of Gahanna case. In its decision, the court ruled that the defendants in the case must pay $13.2 million to class members for tax years beginning in 2008 through 2014.

“In light of the court’s most recent ruling, we are prepared to move forward with our appeal to the higher court,” said Gahanna Mayor Tom Kneeland. “We assert that the City has correctly interpreted and consistently applied the tax ordinance to give credit for taxes paid to another municipality. It is important to note that this ruling is independent of the current ballot issue 29, which is critical for our streets, safety, and community.”

The City of Gahanna disputes the allegations of liability in the prior decision and maintains that it has correctly interpreted and consistently applied the reduced tax credit which requires that if a person lives in the city of Gahanna, but works and pays taxes to another city, they are required to pay 0.25% of their income for receiving city services. On February 8, 1989, the City of Gahanna amended its income tax ordinance by eliminating a sentence which included the word “lesser.” The complaint alleged that this change meant that taxpayers who live in Gahanna and pay taxes to a different city, like Columbus, at a rate higher than 1.5%, should get a 100% credit, effectively paying nothing to the City of Gahanna.

The City of Gahanna asserts the determination of liability made by the court in a prior decision is not valid. Now that the Court of Common Pleas has issued a final order, Gahanna is now able to proceed with an appeal to the 10th District Court of Appeals regarding the entire case. The most recent ruling by the Court of Common Pleas provided a decision on the amount of refunds, interest, penalty, and fees to be refunded to class members.

“The City of Gahanna remains accountable, responsible and transparent in managing its finances,” said Dottie Franey, city administrator. “Now that a decision has been made, we are in a position to provide information and updates to the public regarding the pending litigation.”