Hillsboro City Council on Monday took action designed in the long run to prevent the state from taking over collection of municipal income taxes.
Council approved an ordinance conforming to new state laws related to municipal tax collection, conditional on the outcome of a restraining order request against the state that would block it from collecting local tax revenue.
Hillsboro Law Director Fred Beery told council members at their regular meeting Monday evening that the city has joined a lawsuit seeking an injunction against the state to keep it from collecting local tax revenue, following a recent law change that would allow the state to process some municipal income tax returns, then remit the revenue back to the municipality.
Beery told The Times-Gazette that Hillsboro joined the lawsuit because officials were concerned the state would “just take over the municipal income tax and it would effectively be a new state tax.”
“Pretty soon, there will be an add-on charge,” Beery said, “and pretty soon it’s not our tax anymore. It’s their money.”
In the meantime, the legal team representing the city in the lawsuit recommended council pass an ordinance amending the city’s tax code to match the updated Ohio law, because “if we don’t, the state is authorized to retain all of the local taxes until we comply,” Beery said.
Council suspended the three-reading rule and approved the ordinance as an emergency Monday. The vote was unanimous.
Beery told The Times-Gazette on Tuesday that the state legislature in 2015 began taking steps toward making tax collection policies more uniform, and while lawmakers said related policy changes were intended to make Ohio cities more business-friendly, Beery said there has been concern that the policy changes indicate the state is moving toward collecting more local taxes.
If the lawsuit is successful, nothing will change, Beery said.
“This is a big fight,” he added. “People will feel it in their pocketbooks… I really have a problem with (the state) being in charge of our income tax.”
Hillsboro Mayor Drew Hastings last year expressed his opposition to the state plan, saying last March, “I don’t like centralized anything” when it comes to state versus local issues. “It’s just an effort to get more money away from local governments and have expenditures controlled by the state.”
In other business Monday, council tabled two resolutions on the agenda.
Council President Pro Tempore Justin Harsha, sitting in for Lee Koogler, placed in the Finance Committee a resolution to join the Paint Creek Joint Fire/EMS District. The resolution was set for a third reading Monday.
Harsha also placed in the Finance Committee and Employee Relations Committee an ordinance establishing new pay schedules and adjusting compensation for non-union city employees. Both topics will be discussed at upcoming meetings of those committees, Harsha said.
Hillsboro Mayor Drew Hastings’ Administrative Assistant Debbie Sansone read written reports from Hastings and Safety and Service Director Mel McKenzie, who were both absent from the meeting.
The mayor wrote that he had “nothing major to report,” and “everything is progressing as it should.”
Hastings’ report said Hillsboro’s community improvement corporation (CIC), recently listed the old water plant property on North High Street for sale for $80,000.
Hastings’ report also said the city is working on a solution for the “long-neglected records issue.” Sansone said the city is trying to identify a more secure place to store records.
McKenzie said in his report that winter weather has “played havoc” on the city’s water system, and he has been pursuing grants and low-interest loans to pay for improvements.
Councilman Brandon Leeth, chairman of the Utilities Committee, said the committee will meet soon to discuss grant and loan applications.
McKenzie, in his report, thanked public works lead Shawn Adkins and city crews for making repairs and keeping streets clear in bouts of winter weather.
McKenzie commended Greg Jones of Cornerstone Masonry for an “excellent job” putting up a brick wall on one side of the Colony Theatre lot. McKenzie’s report said the next wall should be finished within a couple weeks if the weather cooperates.
McKenzie said in his report that he gave a presentation at a recent meeting of the Street and Safety Committee and Community Enhancement Committee concerning a sidewalk replacement and repair program he created to streamline and correct the city’s current policies on the matter.
Councilman Adam Wilkin, who chairs the Street and Safety Committee, said McKenzie gave a solid presentation and “was able to satisfy all the inquiries” from three members of the public who were present.
Council also suspended the three-reading rule and approved the following measures:
• An ordinance approving the Solid Waste Management Plan.
• A resolution naming the City of Hillsboro appointment (McKenzie) to the District 15 Public Works Integrating Committee.
• A resolution to enter into an agreement with the Highland County Commissioners to provide legal counsel for indigent defendants in Hillsboro Municipal Court.
• A resolution authorizing the mayor to enter into an agreement with the Ohio Development Services Agency (ODSA), for the administration to continue the City’s Economic Development Revolving Loan Fund.
• A resolution authorizing the city to enter into an agreement with the Ohio Department of Transportation in the matter of widening Harry Sauner Road.
Council also approved routine financial resolutions.
Reach David Wright at 937-402-2570, or on Twitter @DavidWrighter.