8525-11 Oppose state control of municipal income tax collections

Home Browse Search

RESOLUTION NO. $525-11 BY: Anderson, Bullock, Burns, Madigan, Nowlin., Powers, Smith. A RESOLUTION to take effect immediately provided it receives the affirmative vote of at least five (5) members of Council, or otherwise to take effect and be in force after the earliest period allowed by law, opposing the State of Ohio from seeking to take control of municipal income tax collections. WHEREAS, during recent communications by Governor John Kasich, Lieutenant Governor Mary Taylor, and Ohio Tax Commissioner Joe Testa it has been proposed that the State Department of Taxation take over collection of municipal income taxes; and WHEREAS, income tax is the largest source of revenue for most municipalities, including Lakewood, and any disruption or interference with the current collection proc- ess will be harmful to our financial operations, especially in the wake of the State of Ohio's sweeping reductions of the Local Government Fund, and elimination of the Estate Tax and the Commercial Activity Tax; and WHEREAS, Lakewood: • is the most densely populated city in Ohio, in excess of 9,400 people per square mile; • is home to approximately 50 percent rental units among its 28,000 housing structures; • demands an extraordinary, localized effort to collect taxes due because of sig- nificantturnover ofnearly athird of these units annually; • receives in-person municipal income tax payments from over 9,000 residents annually; and • maintains collection and processing costs that are less than the regional op- tions currently available; and WHEREAS, the City of Lakewood, not the State of Ohio, is best positioned to track individuals and businesses as they move into or out of the City; and WHEREAS, the prospect of state control of municipal income tax collection pre- sents numerous administrative difficulties including, but not limited to: • how the state will administer local tax ordinances; • how and whether the state will pursue delinquent taxpayers on the municipali- ties' behalf; • when and how often collected revenues will be distributed to municipalities; • how retention of and access to tax records will be handled; • how the reporting of tax collections to municipalities will be handled; and • how the state will guarantee the level of customer service and ease of filing currently provided by the City of Lakewood; and WHEREAS, although current pending legislation does not contain any provision for the state to take control of municipal income tax collection, pending legislation could be so amended or new legislation could be presented at any time; and