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Columbus Dispatch...
Central
tax-man plan has few fans
Cities cold toward Kasich idea for local tax collection
By Joe Vardon
8/31/11
Centralizing
municipal income-tax collections is an
idea Gov. John Kasich has kicked around for months, and it continues to
percolate within the Department of Taxation.
But as Tax
Commissioner Joseph Testa approaches some
municipal leaders about the possibility, he has been met with tough
questions
from some and opposition from others.
“Conceptually, we
don’t agree with the statewide
collection of local taxes,” said Brian Hoyt, a spokesman for Gahanna
Mayor
Becky Stinchcomb.
Testa recently spoke
with Stinchcomb about statewide
local tax collections, a notion that is opposed by the Ohio Municipal
League.
“From what little we
know about what they’re looking to
do, it’s not something we would support,” Hoyt said.
Gahanna Finance
Director Angel Mumma also opposes the
idea and recommended the city council draft a resolution in opposition
to
centralizing local tax collections.
Gahanna outsourced
its local tax collections to the
Regional Income Tax Agency last year, but Mumma said she is concerned
the city
would lose its ability to enforce its tax code.
She also said she is
concerned about local tax money
going first to the state and being redistributed back to municipalities.
“The income tax is
our largest revenue source, and I’m
very concerned about losing control over that source,” said Mumma,
referring to
the $12.7 million the city pulled in through its income tax last year.
In an interview with
The Dispatch, Testa acknowledged
that leaders he’s spoken with have asked some questions that his
department
doesn’t yet have answers to — “questions I’d ask if I were them.”
“We’re still in the
investigating stage,” Testa said.
“But this administration wants to move Ohio in a tax-friendly,
business-friendly direction, and we feel this fits into that general
theme.”
The Kasich
administration is drawing influence on
centralized municipal tax collections from the Ohio Society of
Certified Public
Accountants, which last year recommended studying the feasibility of
centralizing local tax administration and collection — possibly through
a
piggyback tax on state tax returns.
With 579
municipalities assessing an income tax,
according to the Ohio CPAs, Testa said the state’s municipal tax codes
are
confusing and cumbersome for businesses that have operations in
multiple Ohio
cities.
“We’ve heard stories
from businesses that are reluctant
to do business in Ohio because of our complex municipal-tax systems,”
Testa
said.
The Ohio CPAs and
the Kasich administration both think
centralizing local-tax collections would help municipalities control
costs by
allowing them to operate with fewer staff members.
But a study
conducted in the city of Montgomery, a
small community in Hamilton County, said the city could pay $27,000
more per
year for someone to manage its local tax collections than it pays the
two
full-time city workers and one part-timer who do that.
Kent Scarrett, a
legislative representative from the
Ohio Municipal League, said some local officials are leery of
centralizing
local tax collections in light of the recently enacted state funding
cuts to
local governments — $633 million during the next two years.
“Folks are concerned
about the possibility of a loss of
revenue because the money would go first to the state,” said Scarrett.
J. Matthew
Yuskewich, of the Winterset CPA Group, said
he’s not surprised by local opposition to centralizing tax collections.
“For people who live
and work in the same city, it’s no
big deal. But if you live in one place and work in another, or more
importantly
if you’re a business with operations in multiple cities, the local tax
structures can be a big mess,” Yuskewich said.
Read it at the Columbus Dispatch
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