Council blasts Kasich’s budget proposals for municipal taxation

The city of Avon Lake will consider joining other cities in rejecting the state government’s proposed changes to municipal taxation in the 2017-18 budget.

At the Avon Lake collective committee meeting April 3, Council members debated a resolution opposing a provision in the state budget to remove some taxation authority from municipal governments.

The new provisions would shift taxation authority for the collection of net profit business income for municipal corporations and business entities from RITA (Regional Income Tax Authority) to the state government.

In contrast, all other municipal taxes are collected by RITA to which Avon Lake receives regular remittances twice per month.

Avon Lake Finance Director Steve Presley said the city has been given no guidance as of yet as to when and how often this money will be collected, opening the door for a potential threat to Avon Lake’s fiscal position should this provision go into effect.

“The agency (RITA) is opposed to it and we are working with all relevant people down at the state to get them to remove this from the budget bill, Presley said.

There is an effort in Columbus to remove net profit taxation provision from the budget bill to be taken up in a separate piece of legislation, he said.

However, until such action occurs, municipalities across the state are being encouraged to pass resolutions strongly opposing this proposal by the state.

Because all other taxes are collected by RITA, Avon Lake officials say they are concerned about the lack of municipal oversight and potential for more municipal tax to be shifted to the state level.

“They do quote a fee of one percent, but that is subject to change at the state’s whim and we have no authority or any vote or any oversight to get into to any of that,” Presley said. “And there is concern that this could lead into a creek of the state trying to collect other municipal income taxes.”

The proposed changes have Lorain County municipalities on edge due to the uncertainty of what it will mean for their financial priorities and the lack of local control.

Avon Lake Mayor Greg Zilka did not mince words in his rejection of the state government’s proposal and said based on the actions of the state government over the past several years, it does not appear they have much empathy for the concerns of local governments.

“This is another opportunity for them to say they aren’t taking any more money from us and that they are just going to hold on to it for six months or a year as Mr. Presley stated,” Zilka said. “They would have access to those funds to help pay their bills at our expense.”

Presley urged Council to move forward with the resolution as quickly as possible to show support to RITA and other Ohio municipalities.