Hillsboro Mayor Drew Hastings will introduce a resolution at Monday’s city council meeting opposing Gov. John Kasich’s plan for the state to take control of business income tax filings that are currently filed with the city.
The idea, included in Kasich’s 2017-18 budget proposal, would require businesses to file net profit tax returns with the state rather than with the municipalities in which they are located, with the state deducting a one percent fee before returning the remainder to the towns or cities. The plan does not affect tax collections from individual filers, only businesses.
Hastings said Friday he opposes the proposal for a number of reasons.
“I don’t like centralized anything” when it comes to state versus local issues, said the mayor. “It’s just an effort to get more money away from local governments and have expenditures controlled by the state.”
Hastings is the latest among many mayors across Ohio going on record to oppose the plan, and he’s not the first mayor of Hillsboro to voice opposition to the idea. A similar proposal floated by Kasich and other state officials in 2011 – which would have centralized collection of all municipal taxes – was opposed by then-mayor Dick Zink, and city council unanimously approved a resolution against the tax idea in November of that year.
“This type of centralized income tax collection would cause a hardship to local governments,” Zink said at the time, according to a Times-Gazette article.
Kasich and others defend the proposal on the basis of reducing paperwork and streamlining the number of tax forms that need to be filed by businesses.
The Ohio Municipal League is on record opposing the centralized tax plan, saying the state’s collection of one percent of the revenue would be higher than the cost to municipalities to administer their own local tax, businesses would lose the benefit of free, easily accessible local assistance, local control would be further eroded by the state, the state could change the amount it keeps at any time to ensure state solvency at the expense of local governments, and the quarterly distributions of state-collected municipal revenue “will interrupt and impede the ability of cities and villages to meet the daily financial obligations.”
“Other political subdivisions that receive revenue back from the state through a central collection mechanism such as municipalities that receive revenue from the state by utilities in their limits, sales tax distributions to counties, school districts that receive revenue through the school district income tax, etc., have experienced uncertainty regarding the amounts of revenue returning to their communities and are provided no recourse to challenge or have the amounts verified as being accurate,” according to a municipal league statement.
Reach Gary Abernathy at 937-393-3456 or on Twitter @abernathygary.