Communities satisfied with RITA
LISBON — The six communities in Columbiana County that switched to RITA are glad they did so.
Officials from the communities say contracting with the Regional Income Tax Agency not only saved the taxpayers money and improved tax collections but made it easier for the people they serve.
“For us, it really has worked out for the village, and even for the citizens” because of the convenience of online filing and being able to do so anytime, said Wellsville Fiscal Officer Hoi Black.
New Waterford Fiscal Officer Dave Slagle said the same thing. The village income tax was enacted in 2004 and council replaced their income tax collection office two years later with RITA, “which is probably the best thing they did,” he said.
RITA is a non-profit agency created under Ohio law by the Council of Regional Governments to provide municipal income tax collection services to cities and villages. The other communities in the county using RITA, besides Wellsville and New Waterford, are Salineville, Leetonia, East Palestine and Columbiana.
Salem council approved switching to RITA earlier this year, with officials there expecting it to save the city $50,000 a year to start. A citizens group there believes the decision should be left to voters and are trying to get a referendum on the November ballot, leaving the RITA issue up in the air for now.
Lisbon is also considering contracting with RITA after the village fired its part-time tax administrator in January for failing to show up for work. East Liverpool and Washingtonville are the only other communities in the county with an income tax that are not using RITA, and Washingtonville’s tax just went into effect in January.
Most of the communities have been using RITA for more than a decade — 25 years in Salineville’s case –and officials say the residents are used to it by now. Because so much time has passed since they first switched to RITA, officials in those communities could not readily provide figures on how much they saved or whether collections went up as a result.
Leetonia is the most recent community to switch to RITA, which it did in July 2017 after the village income tax administrator retired the year before. The village hired someone part-time to fill in until council decided to contract with RITA.
Leetonia Fiscal Officer Randy Chismar said RITA’s upfront fee is 3 percent of every payment it receives, including delinquent tax collections. Each year the company performs a rate-adjustment study to determine the actual cost, and RITA officials say the majority of communities end up being reimbursed, while some are charged more. RITA is audited by the state each year.
RITA’s Amy L. Arrighi said the amount charged the majority of communities is less than 3 percent, with the average being 1.5 percent in 2017 and 1.4 percent the next year.
“Because RITA is a collection of more than 300 Ohio cities and villages, municipalities that join RITA benefit from basic economics of scale. In short, municipalities that join RITA are able to do more for less, experience lower costs, an increase in revenue and an increase in services available,” Arrighi said.
In 2015 — the last full year Leetonia operated a tax collection office — the cost to the village was $30,927. In 2018 — RITA’s first full year running the program — it was paid $14,165, or 1.7 percent. Meanwhile, Leetonia tax collections increased from $652,254 in 2015 to $801,626 in 2018.
Following is a list of the other communities, the amount of taxes collected in 2018 and what RITA was paid:
East Palestine, $995,943, $29,869, 3 percent
New Waterford, $157,499, $7,510, 4.7 percent
Salineville, $133,528, $6,423, 4.8 percent
Wellsville, $628,873, $18,951, 3 percent
New Waterford’s Slagle was not around when the village switched to RITA but he said using them has to be saving money. “We couldn’t pay a tax administrator to do the same job they’re doing,” he said.
Salineville Fiscal Officer Donna Rudder agrees. “We couldn’t do it, we just couldn’t do it” for what they pay RITA, she said. “There’s so much they do that it just doesn’t make sense not to use them …”
RITA has more staff and resources at its disposal, especially in tracking down taxpayers and collecting delinquent taxes. “That’s all they do. That’s their specialty,” Slagle said.
RITA benefits from a partnership with the Internal Revenue Service, a service available only to municipalities with more than 250,000 residents or through regional councils of government, like RITA.
In addition to a variety of online services, including electronic filing and payment system, RITA offers taxpayers around-the-clock access to their accounts as well as an automated phone system, if they prefer, to check on the status of their estimated payments, refunds or balances due. There are RITA staff taxpayers can speak with by phone during normal working hours.
Wellsville’s Black is most impressed by how easy RITA is to work with and how helpful they are. She said each community designates a local official at village or city hall to serve as a RITA liaison for anyone who stops in needing help. The designated liaison is usually the fiscal officer, and in Wellsville, the designees are Black and Mayor Nancy Murray.
Black said she and Murray help the public by giving them the proper forms to fill out when possible or refer them to RITA or call RITA on their behalf to get the answers. She said the liaisons also have the authority to waive penalties and interest on delinquent taxes, depending on the circumstances.
“If the liaison takes an active role, and I don’t see why they couldn’t take an active role, they would provide the personal touch you’re talking about,” Black said. “It’s important to take the time to help your people.”
Wellsville only gets about one or two walk-ins per tax season seeking help, which seems fairly typical of the communities that have used RITA for a while.
“Really, since the first year I haven’t had anyone come in,” said Leetonia’s Chismar. “This past year I didn’t have anyone come in at all.”
Chismar was not surprised collections have increased significantly since Leetonia switched to RITA. “That’s part of the reason we went to them … I think they do a better job collecting what is due,” he said.
There were $75,000 in delinquent taxes when RITA took over in Leetonia, but Chismar said the company whittled that down to about $5,000 in two and a half years. The new tax delinquencies have grown to more than $30,000, however, and RITA is getting to work on collecting them.
RITA will also issue subpoenas for delinquent taxpayers requiring they appear at village or city hall, where the offenders are given a chance to pay up or enter into a payment plan, which usually results in any late fees or penalties being waived. This is an additional service, and the cost is $8 per subpoena. East Palestine, New Waterford, Salineville and Wellsville used the subpoena program in 2018, with the cost ranging from $1,348 for New Waterford to $3,736 for Wellsville.
The city of Columbiana switched to RITA last summer following the retirement of their longtime tax administrator. City Manager Lance Willard said RITA’s ability to go after delinquent taxes is definitely a benefit.
“RITA has the resources that we believe will allow us to collect from all the individuals that we may have not been able to collect from before,” he said.
Columbiana spent $158,409 on tax collections in 2018, the last full year the office was in operation, and Willard expects contracting with RITA will save them $50,000.
“That being said, our decision was based upon more than that. With the tax law changes and the amount of returns increasing, we were getting to the point that we could not handle it with one staff member. We had one part-time person to help keep up” and would have needed to hire more staff had they not switched to RITA, Willard said.