OXFORD — Oxford City Council recently approved a resolution strongly opposing the Ohio Governor John Kasich’s proposed 2017-2018 budget.
The resolution, as in other communities, is in response to the proposed centralized collection of net profit tax returns, which local municipalies are affraid will cause a substantial loss of revenue.
House Bill 49, the State of Ohio’s biennium budget bill, was introduced in the Ohio House of Representatives on Feb. 8. It will remove the administration of municipal income tax on business net profits from municipalities, and instead give the authority to the Ohio Department of taxation and the Ohio Tax Commisioners, beginning on Jan. 1, 2018. It will also eliminate the sales “throwback” rule, reducing reportable tax revenue to municipalities with warehouses, distribution centers, and any business providing online sales.
According to Oxford City Manager Doug Elliott Jr., these items will have a negative impact on the municipal income tax revenues and cash flow. The local tax income is the major source of revenue for the General and Fire/EMS funds. It also provides funding for the city’s Capital Improvement and Equipment Funds.
City officials view the proposed budget as a “clear attack on the home rule powers granted to municipal corporations by the Ohio Constitution.”
As stated in the resolution, the recent reduction in Local Government Funds, elimination of the Estate Tax, and accelerated phase-out of promised reimbursement for loss of revenues due to the repeal of the Tangible Personal Property Tax have resulted in a loss of revenue over $700,000 per year.
Elliott added, “We have an agency, which is the Regional Income Tax agency, that collects the city’s income tax. It does a very good job with that, including making sure that tax payers comply. I am concerned that if this proposal goes through that compliance will not be the same.
“If you look at the Department of Taxation, and the number of tax agents they have, it has been declining over the last six years. So, what are we talking about, bigger state government here? I just do not think that this has been thought through. It is an effort to take away our local income tax administration, and I think it is a bad idea.”
Ohio State Senator William P. Coley, II and Representitive Candice Keller will be receiving copies of the resolution. Councilmember Steve Dana urged concerned citizens to call or email their state representatives.
Reach Kelsey Kimbler at 937-683-4061 or on Twitter @KKimbler_RH