By Rick Palsgrove
Groveport city officials believe state legislators are pursuing actions that could eventually lead to a significant loss of income tax revenue for the city.
“It appears that the state of Ohio is pushing hard to dismantle municipal income tax as we know it today,” said Groveport City Administrator Marsha Hall.
Hall said an amendment inserted into the state budget being discussed by state legislators would require all municipalities to submit a breakdown to the state annually of resident versus non-resident income tax revenue. The amendment passed in the Ohio Senate on May 21 and will be considered by the Ohio House of Representatives soon.
“The city of Columbus, who collects our income tax, does not currently collect our information in this manner,” said Hall. “There will obviously be additional cost for us to do this. This would also require the city of Groveport go to mandatory filing requirements, even if the businesses do not owe, so that this information can be reviewed. This would be hardship on the businesses and the city alike.”
Hall said additionally, the state is considering legislation that would make sole proprietorships with a net profit exempt from paying municipal income tax.
“It’s like the state legislature is throwing darts at the wall to see what idea sticks,” said Hall. “The state’s eventual goal appears to be that they want resident only income tax collection.”
Currently the city can collect a 2 percent income tax on those who work in the city whether they are residents or non-residents.
Groveport Finance Director Jeff Green said, if the state decides in the future to make municipal income tax collection apply only to the residents of a city, “It would decimate us financially.”
Green said approximately 90 to 95 percent of the city’s revenue comes from income tax withholding.
Hall said Groveport city residents have benefitted from the existing income tax structure.
“The city has provided so much for the residents through an aggressive economic development plan,” said Hall. “Without it I don’t know how we would fund things like the recreation center, aquatic center, parks, the golf course and more.”
Hall said city officials will continue to monitor the actions at the Ohio Statehouse regarding this matter.