Council elected to be great steward of taxpayer money
To the editor:
There is one statement in John Conrad’s recent letter to the editor (Feb. 17) with which I agree: the city ought to spend its funds wisely. This is precisely what Salem City Council and Mayor Berlin propose to do in contracting with the Regional Income Tax Agency.
There has been a great deal of misinformation, however, bandied about as to what RITA will and will not do for us, both financially and operationally.
RITA will not cause your local income tax rate to increase as Mr. Conrad seems to have suggested it could. Only your local city council and mayor can set that rate.
RITA will not cause us to lose the value of interest that we currently earn on city funds collected. RITA has repeatedly made it clear that its annual fee, averaging 1.42 percent of collected funds, takes into account and credits its city clients with this earned interest.
Finally, each time RITA has appeared before council to present its case, they have committed to supply personnel to Salem, during tax season. Therefore, no one will need to drive to Youngstown or Streetsboro to ask a question about their taxes.
The real cost savings with RITA is in its ability to do two things that no small town like Salem can do: 1) offer the taxpayers the ability to file their returns online and 2) enhance taxpayer collection and compliance.
Therefore, instead of our local tax office manually opening up approximately 7,000 tax returns and manually processing them, RITA projects that 50 percent of our local returns will get filed electronically — no human hands touching the process. For those who manually file their returns, funds go directly to a bank “lock box” where interest is earned immediately. An accounting of this is efficiently transmitted electronically back to RITA.
In addition, RITA has tax compliance tools at its disposal that no cities in Ohio with less than 250,000 in population have available to them. Therefore, it actually collects more funds owed to the city than would otherwise be the case.
For the record, neither I nor anybody else on City Council ever suggested that the current tax office is costing 4.8 percent of our tax receipts, as alleged by Mr. Conrad. That would be a sum of approximately $315,000 (4.8 percent multiplied by $6,564,965.65 — 2019 total income tax received — equals $315,118.35). Based upon historical data, leading up to the end of fiscal year 2020, our current tax office is projected to cost about $200,000. I encourage Mr. Conrad to sit down with me, review the data, so it may clear up any misunderstandings he has on how those numbers were derived.
Finally, RITA is not a private entity out to “make a profit” on the backs of Salem taxpayers. To the contrary, RITA is a state-chartered, not for profit, regional governmental authority designed to do for smaller communities what they cannot do for themselves. In the case of Salem, the projected savings are upwards of $80,000 per year based upon an analysis conducted by our mayor, gauging the savings of cities most comparable to Salem. This is not conjecture. It’s public record.
Added to this, RITA’s enhanced taxpayer compliance factors could easily take us to a savings in excess of $100,000 per year or $1 million dollars over the next decade. That’s real money to me, real money that can be used to reinvest back into our city. There is a reason why one after another local communities in our county alone have opted for RITA. It is performing as advertised and at a great cost savings to these communities. RITA would provide our city and our taxpayers a value that an “all manual” local tax office simply cannot provide. I cannot emphasize this point enough: council is elected then held accountable not to be good or average stewards of taxpayer money but rather great stewards of taxpayer money while evaluating risks to rewards. Period. Isn’t that why elected officials stand for election: to experience either the voter’s wrath or approval?
Councilman at Large,