Misconceptions vs. facts regarding RITA
To the editor:
A lot of negative statements about RITA are being circulated by opponents to serve their political agendas and personal vendettas. Let me present you with the facts.
#1: No tax payer will owe more money with RITA than they would have owed without RITA. By ordinance and voter approval, Salem has 1% permanent income tax on all earned income and a 1/4% temporary income tax for streets, alleys, sidewalks, parking lots and curbs. Not another penny can be required. We also have a reciprocity credit of 100% for residents who pay local tax up to that amount paid to another local government. So if a Salem resident works in a city that has a 1% local income tax, the resident gets credit for 1% and only pays 1/4% to Salem. If that city has a 1 1/4% or greater tax, the Salem resident pays no tax to Salem. This will not change with RITA.
#2: RITA is not insolvent and is not a financial risk to the city of Salem. Their bottom line is consistently solid. They have reported losses in years of massive expansion, but maintained a positive bottom line every year while adding assets to the company. They are a nonprofit corporation.
#3: Taxpayers would not be required to travel to a far off city to get problems resolved. RITA is easily accessible by phone and computer to resolve any issues that occur. Information can also be faxed or mailed. In the event of a major disagreement with tax collection, which is rare, the Salem Income Tax Review Board will have the final say on disputes just as they do today.
#4: Senior citizens on Medicare, Medicaid, and Social Security will be not be required to figure out the RITA collection process. Seniors depending on only these incomes are not required to pay the city income tax. They simply file for an exemption and no longer need to file a local tax return. An advantage with RITA is that they will catch seniors who return to work and try to avoid paying taxes on their newly-earned income. Our tax office does not have the ability to do this. RITA does not require any citizen to use their form to file local taxes. Any city income tax form, even our current form can be used to file your taxes with RITA. Taxes can be submitted on paper and mailed or electronically with RITA.
#5: The temporary 1/4% income tax earmarked to go entirely to streets, alleys etc. will be handled exactly the same way it is handled today. RITA will send a report with collections stating how much was collected from each source. That amount from the 1/4% will be deposited into that budget item in whole after refunds, just as it is today. The cost of collecting the tax will be paid out of the remaining taxes just as it is today, but the expense of collection will ultimately be less due to RITA.
#6: Four Salem city residents will not lose their jobs. While these are Salem city employees, they are not all Salem city residents. Only one part-time employee lives in the city of Salem. Yes, they are Salem taxpayers but only to the tune of $1,750 last year. They have been effective employees but at the budgeted cost of over $200,000 for 2020 tax office operation, do they have the right to be considered more important than the welfare of over 12,000 city residents? More important than the financial stability and growth of the city itself?
#7: RITA is not difficult for taxpayers to manage. Every city I have contacted says they are fair, respectful and efficient. General taxpayers state it is so much easier to file their local taxes with the RITA system. In most cases, the federal tax info populates on to the local form online. Most taxpayers will need to do little more than sign the form. Employers state the current local tax collection is a nightmare and RITA has software that assists them with the process so that cities get their money faster which means more interest for the city. I believe that people who complain about RITA either are trying to avoid paying taxes or have made unrevealed errors in payment in the past, which RITA, being more efficient, has discovered.
#8: RITA does not force people to pay taxes they do not owe. Any legitimate dispute regarding taxes owed are handled promptly. Due to time needed to be completely fair and accurate for the taxpayer and the city, this might take time, as it would today. Any unresolved dispute must have final decision made by the Salem Income Tax Review Board if requested by the taxpayer. Yes there are late fees and penalties if the tax payer is not compliant, but that is true today.
#9: While the economy as a whole is better than past years, our spending is increasing faster than our revenue. City council and administration have had to come before the taxpayers twice in the past five years, to admit that the city’s 1% tax is not enough to maintain our city. We will not have the money in the future to meet the city’s needs if we do not act now. We have a $1.6 million carryover and that is wonderful. It takes $750,000 from that carryover to pay our expenses for the first quarter of every year. (About half). Our infrastructure is old and in need of repairs. Income from county sources and inheritance taxes are drying up. We still have about $13 million in streets that need attention and I don’t believe taxpayers want to continue the 1/4% indefinitely. The recent tax only passed by nine votes. We will get about $5 million from this fund only. After that our annual budget for streets is $250,000. Just enough for minor repairs. I can’t believe we will get more oil and gas money which is how we paid down debt, purchased our firetruck and demolished the safety risk which was the Tanfastic building.
#10: It is my opinion and the opinion of legal experts, that this act, by the city, is not a legally eligible subject for referendum. It is an administrative ordinance. Only legislative ordinances can be placed on the ballot for the voters to decide. You elected a mayor just three months ago to make these decisions. It is under his authority with the approval of council, to do so. The petitioners should have been advised by their legal counsel that this action could be disallowed. To fail to advise them of the possibility of protest would make him remiss in his duties. For me to ignore the oath I took to uphold the ordinances of the city of Salem and the law of the state of Ohio and not protest this action, would make me remiss.
Being the intelligent people I know you are, I believe you can understand why we need to cut expenses. The tax department is a safer choice than police or fire. Not one of the petition committee asked the mayor for information about RITA or his decision to contract with them. The treasurer made no suggestions to cut costs in the tax department when we began discussing RITA as a cost saving action. The hard decision was left to the mayor and to council to approve the contract. We deliberated long and diligently to do that. We went through an election process where RITA was presented as the central issue and those candidates who were perceived to be RITA proponents came out on top.
Thank you for your time.
Cyndi Baronzzi Dickey,
4th Ward Salem City Councilperson