By Jeff Gallatin
Mayor Debbie Sutherland anticipates spending a lot of time traveling to Columbus in the next few weeks to road block anticipated financial problems for cities if the current version of House Bill 5 on municipal income tax reform passes.
“It would hurt cities even more than we already have been by cuts in the local government fund and the loss of the estate tax,” Sutherland said. “I don’t think there’s one city in our area or anywhere else in Ohio that would benefit from this.”
Sutherland said RITA (the Regional Income Tax Agency, which collects income tax receipts for many area cities, including Bay Village) officials are already drawing up initial projections about the potential effects of the bill.
“Right now projections are that it would cost Bay Village about $178,000,” Sutherland said. “That’s something which we just can’t handle right now on top of the other cuts which have come from Columbus recently.”
She said Bay Village derives about 50 percent of its revenue from income tax.
“There are other cities with higher percentages than that,” she said. “I understand the need to streamline the income tax process for businesses, but not at the expense of cities and their residents.”
Proponents of the bill in the legislature, as well as groups like the Ohio Society of CPAs, have said it will make it easier for businesses to deal with income taxes. Amy Mignogna, director of tax policy for the CPA group, said under the current system, many businesses end up paying more than is actually owed in income taxes, and that the bill would streamline the process for businesses.
Sutherland contends the effects of the bill are far worse.
“I don’t think they want the cities to be laying off employees and making major service cuts to deal with the loss of income tax revenue that this would cause if the state becomes more involved in the process like this proposes,” she said. “This is something that many cities and groups are monitoring closely.”
Brandon Dimacchia, head of the Bay Village firefighters union, said safety workers want to make sure residents are taken care of.
“I hope whatever comes from HB5 benefits the taxpapyers,” Dimacchia said.
Sutherland said she anticipates different cities and groups working together.
“We’re all going to be badly affected by this as it stands right now,” she said.
She told Bay Village City Council at its Feb. 11 meeting that she will be making several trips to Columbus in coming weeks to fight against the current bill.
Mike Young, the council vice president and finance committee chairman, reiterated previous comments of support for the mayor and encouraged her to continue her fight against the bill’s effects.