Salem RITA ballot proponent clarifies error
SALEM–Former city council president Mickey Cope Weaver said she’s taking full responsibility for any confusion she caused over the income tax rate in Salem under the Regional Income Tax Agency — the city tax rate is 1.25 percent on earned income — no more, no less.
It’s not 4 percent or 3 percent or even 1 percent — the Salem city income tax paid by taxpayers is 1.25 percent, and that’s what it will remain with RITA.
Weaver came under fire after a television station in Youngstown aired a story about the referendum signature drive to get the RITA issue placed on the November ballot. Weaver, as one of the organizers behind the referendum, was interviewed and made a comment questioning whether she would really be paying 4 percent for her income tax in Salem since RITA would get 3 percent of the 1 percent the city would get.
The way it has been explained is that RITA would take a 3 percent retainer fee on the total amount of income tax collected, then the remainder would be paid to the city of Salem. Councilwoman Cyndi Baronzzi Dickey, who issued a press statement Wednesday calling on Weaver to publicly correct her statements, further explained how RITA would be paid. In a phone interview, she said that the 3 percent fee charged to the city by RITA is only the initial fee and that at the end of the year, based on the amount of work actually done, a rebate would be issued to the city and the actual cost would be less.
Dickey, who was one of the five council members to vote in favor of authorizing the mayor to enter an agreement with the council of governments known as RITA, said Weaver’s statement on television “is leaving the false and misleading impression that Salem taxpayers would face a 3 percent increase in their income tax if RITA were to be enacted when the reality is that RITA has no impact upon what our tax rate is. Furthermore, the city income tax rate is not 1 percent, it is 1.25 percent. Ms. Weaver should know better.”
She also commented that “Ms. Weaver should refrain from soliciting folks to sign her petition under false pretense. And I urge her to publicly correct her statements to this effect immediately.”
Weaver submitted a Letter to the Editor to the Salem News on Wednesday, leading with the fact that she wanted “to clarify any misunderstanding I may have created in a statement I made regarding the cost of RITA when interviewed by a TV reporter.”
She noted that the taxpayer pays 1.25 percent as the tax on their earned income and if RITA is administering the tax, they’ll deduct the retainer fee of 3 percent of the tax received and submit the rest to the city.
“I believe the way I stated on television, I incorrectly stated that in effect the taxpayer would be paying 4 percent. At the time, speaking off the cuff, that sounded right. When I listened to it after, I realized I was completely wrong in the way I presented it. I apologize to anyone that I confused with my statement on TV. I would never knowingly mislead anyone,” Weaver wrote.
When contacted about the letter and what she said, Weaver said she also apologized on her social media page.
“When I make a mistake, I own it,” she said.
Weaver said the whole purpose of the referendum is for citizens of Salem to decide whether they want their tax office. She said they should have a voice in that.
City council voted 5-2 last week in favor of the RITA ordinance, to in effect hand over the city income tax administration and collection to the agency which is headquartered in Brecksville, possibly starting July 1. The two no votes were cast by Councilmen Ron Zellers and Steve Faber. Dickey and fellow Councilmen Andrew Null, Sal Salvino, Roy Paparodis and newcomer Dennis Plegge all voted yes. The vote came after several months of discussion and meetings that included RITA representatives who explained what the agency would do for the city and what the agency already does for several neighboring communities who have entrusted their tax collection to them.
They estimated a savings of $52,000 a year for the city over the cost of the city income tax office, a figure that has been a moving target and depends on many factors. Dickey said the savings may be more because RITA didn’t have all information about the costs of the tax office, such as wage increases for this year.
In her press release, she said RITA supplied city officials with computations for six Ohio cities similar in size to Salem whose average RITA costs totaled $116,400.
“If you compare this figure to the costs of Salem’s tax office, which are approaching $200,000 in FY 2020, the savings to the city would be approximately $80,000 per year. With the enhanced taxpayer compliance systems at RITA, it is estimated that the city would realize total savings of as much as $100,000 per year. Mayors from other neighboring communities confirm similarly substantial savings to their operating budgets since RITA has been enacted,” Dickey wrote.
She said big savings could come from employers who aren’t collecting the city’s tax from their employees now because of the paper process they have to follow. Those people are paying their taxes at tax time, so the city is missing out on the interest. She said no one can predict exactly how much the savings will be until RITA has been in place for a year. After the rebates at the end of the year, she said the six cities similar to Salem were paying RITA closer to 2 percent and less for their services.
She said it’s more than an average taxpayer issue because it also affects businesses already in Salem and those who want to move to Salem. She said they need to make it easier for companies to do what they have to do regarding tax withholding and payments.
Dickey questioned whether the ordinance that was passed is actually subject to referendum, but said if people vote, she’ll follow their wishes. She doesn’t think the referendum for RITA is something that should be happening. She also said, though, that people have a right to speak, but they need to know what they’re talking about.