Avon Fighting State's Local Income Tax Plan

Avon has joined many cities and towns around Ohio to object to Gov. John Kasich's idea of centralizing local income tax collection into a single state agency rather than cities contracting with private companies such as the Regional Income Tax Agency.

Lt. Governor Mary Taylor began floating the idea in the spring, saying it was a way to cut red tape for businesses.

Avon is one of many cities concerned that the plan means less money in their coffers.

Avon's recently passed a resolution objecting to the plan. The resolution was inspired by a similar objection from Broadview Heights.  and also recently passed resolutions.

The Ohio Municipal League, an organization for Ohio's local governments, is not supporting the idea.

Avon Mayor Jim Smith said: "I've never heard of anything so ridiculous. They want to privatize the turnpike but centralize this?"

Smith also wrote a letter to Taylor in August voicing his objections.

"This is a money grab," he said before last week's City Council meeting. "The state's going to charge us more and we'll be losing revenue."

Some key figures provided by :

• Avon pays RITA 2.7 percent of income taxes collected.
• Avon's revenue budget for 2011 is $32,059,878.
• The gross income tax projected for this year is $9,945,000.
• Two-thirds of the income tax revenue comes from business payroll withholding.
• The other third is individual income taxes and businesses' reported net profits.

Avon's concerns are that the state will take a bigger cut of the money, and not be as vigilant about collecting, Logan and Smith said.

Logan said RITA's success in collecting delinquent taxes brings in 2 to 3 percent of the city's income tax revenue, which he said could be lost if the state is not as persistent in going after delinquent taxpayers.

Most of those delinquencies, Logan and Smith said, are from businesses, especially contractors and sub-contractors.

"RITA worked with us to make sure all the sub-contractors working on the new had filed 1099s," Logan said. "Every time a contractor registers with our building department, we send the information to RITA and we know they're going to be on it. How much of that work is now going to fall back on us if the state takes over? Are we now going to have to spend money to hire people and buy computers and such to do what RITA does?"

One of the reasons cited by the Kasich administration for centralizing local income tax collection is that it will make tax work easier for businesses who have to navigate multiple tax forms for multiple communities.

"There's a simple solution," Logan said. "Tax forms can be standardized. All the agencies can work with that. Putting so much of our revenue collection under state control is not good for cities. It's against common sense."