Salem council OKs change in delinquent income tax collection
SALEM — City council authorized a change to its delinquent income tax collection Tuesday.
Council has discussed the possibility of shifting its delinquent income tax collection from the Ohio Attorney General’s Office to the Regional Income Tax Agency (RITA), which already manages the rest of the city’s income tax collection, extensively in multiple council and committee meetings since Treasurer Todd Mumpire first proposed the change in February. Tuesday, council voted six to one in favor of approving a resolution authorizing Mumpire to enter into an agreement with RITA to take over delinquent income tax collection, with the lone dissenting vote given by councilman Evan Newman.
RITA already identified delinquent taxpayers for the city and sent them letters notifying them that they need to file their city income tax; however, under the previous system, that was where the process stopped. With the new agreement in place, RITA will pursue those outstanding debts through civil court action on the city’s behalf, creating new avenues to possibly recover the balance, including wage garnishments and property liens.
As with the city’s income tax collection, RITA will initially withhold 3% of what they collect for the city until their actual cost of collection is calculated at the end of the year and divided evenly amongst all municipalities enrolled in the program, and the city will be reimbursed for the overage. The city will also have an initial retainer fee of $3,000 to cover the initial expenses of attorney’s fees which would be withheld from one of the city’s income tax disbursements, meaning there wouldn’t be any money actually coming out of the General Fund for the fee. Once RITA begins officially filing civil cases to retrieve outstanding balances, those costs will be incorporated into the judgments being sought to pass them onto the delinquent taxpayer and refill that $3,000 pot.
The city initially chose collection through the state over RITA because it was believed that the attorney general’s fee of 10% of the collected balance was passed on to the taxpayer so that the city would receive the full balance; however, it was subsequently found that the fee was taken out of the outstanding balance, cutting into the city’s bottom line, which prompted Mumpire’s recommendation.
Newman said that he voted against the change because he didn’t feel the additional $3,000 investment was necessary, but that he would stand with the rest of the city council’s decision moving forward.
“While I think that it is a good tool, and it was presented in a good way, I still have reservations about outsourcing it when I feel it should be the treasurer’s job to go after and we have a tool in the attorney general’s office that was working,” said Newman.
While City Law Director Brooke Zellers did not have a formal report, he offered his condolences to the family of Ray Cox for his recent passing and wished residents a happy holiday.
During his report Newman announced that the residential committee would be meeting at 6 p.m. July 15 to discuss potential updates to the city’s fencing ordinance and potential updates to the city’s zoning code.
During the pleasure of council Newman congratulated his wife on the successful delivery of their first son and wished everyone a happy and safe Fourth of July. The rest of the members of city council congratulated the Newman family on their newest addition and also wished everyone a happy holiday.
The meeting concluded with an executive session for the discussion of personnel matters with no action following.
Council will meet next at 7 p.m. on July 15.