Athens City Council Against Centralized Tax Collection

By
Michael Locklear

Dateline
Updated Tue, Sep 20, 2011 8:48 am

Athens City Council doesn't want the state to collect its income taxes.

Ohio Tax Commissioner Joseph Testa says the state's current web of municipal taxes is too complex and bad for business.

Last year, the Ohio Society of Certified Public Accountants recommended that the state look into centralizing local tax collections.

Athens City Auditor Kathy Hecht says that would be bad news for Athens.

"I think (centralized tax collection) would be a disaster," she says, "and it would absolutely cost the city money that we can't afford at this point in time."

Hecht says the state would charge an administrative fee for collecting the taxes, and that fee could be around 3 percent.

"We would probably end up increasing income tax for our local citizens to make up for the loss," Hecht says.

She added that Athens brings in about $10 million of its $30 million budget through income taxes. A 3-percent administrative fee would mean the city would have to pay the state $300,000 each year. Currently, Athens pays two people to process the taxes, and their annual salaries add up to about $150,000.

Hecht says another problem is cash flow. If all the checks went to the state, there would be a time lag before Athens got the money.

"It's pretty clear that no finance officer, auditor, or treasurer, or tax administrator thinks this is a good idea," Hecht says.

A resolution passed at Monday's meeting means Athens will send a letter opposing centralized tax collection to the governor, state treasurer, and local representatives of the Ohio Legislature.

Hecht says the tax collection plan is being kicked around pretty seriously.

"This finance officer that I talked to today believes it's intended to go into a bill in the spring, which seems far off, but the idea is to educate our lawmakers now before it's already in a bill and they are asked to vote on it."

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