Northeast Ohio mayors oppose state legislation they believe will take millions in city tax revenue

Mayors project $14M loss in local tax revenue

CLEVELAND - Mayors from 30 northeast Ohio cities held a news conference to object to House Bill 5, proposed state legislation the mayors claim will take millions in tax dollars from local cities.

The group was led by Cleveland Mayor Frank Jackson and organized to show opposition to Ohio House Bill 5, a measure sponsored by state representative Cheryl Grossman (R-Grove City).

Those in support of HB 5 maintain it would streamline the tax collection process, and reduce Ohio's nearly 300 tax forms, making the state more business friendly.

However, local mayors project it will come at the cost of local tax revenue and give state leaders more control over how taxes are collected and distributed.

"HB 5 would have serious consequences for Cleveland and cities throughout Ohio. It seeks to limit local control over taxation, reduce our revenue and increase our administrative costs," said Cleveland Mayor Frank G. Jackson. "It will only compound the impact that recent revenue cuts mandated by the State have had on our communities."

Mayor Jackson believes the legislation would dramatically change Ohio's municipal income tax provisions.

Mayor Jackson stated the proposed legislation contains several provisions relating to municipal income tax that will adversely impact communities. HB 5 would limit cities' ability to tax certain business activities, redefine residency issues and centralize administrative activities

Willoughby Mayor Dave Anderson explained some of the biggest impact would be felt on how much regional income taxes would stay in local city control.

"The Regional Income Tax Agency, which my city is a member, has done an evaluation of HB 5," explained Anderson. "It has determined the impact on RITA communities in the first year to be estimated at $14 million."

Mayor Jackson told NewsChannel5 HB 5 will call for the creation of a tax policy board, a board that would be appointed by Ohio Governor John Kasich.

Lakewood Mayor Mike Summers believes giving control of tax collection and distribution to the state is the wrong way to go.

"Over 50 percent of our 32,000 housing units are rental units. It takes a big effort to collect that tax, but we've figured out how to do that well," explained Summers. "No bureau in Columbus is going to have the wisdom that we have."

Shaker Heights Mayor Earl Leiken projects his city will lose more than $300,000 in tax revenue, in the first year, if HB 5 passes.

Leiken believes the legislation is simply unfair to the residents of his city, who stand the risk of losing key city services, and face higher taxes to make up for more revenue being kept in Columbus.

"We've already lost millions of dollars as a result of the elimination of the estate tax and half of the local government fund," said Leiken. "This loss would compound a problem that has already occurred."

Bay Village Mayor Deborah Sutherland believes HB 5 would cost her city $178,000 in 2013, if passed.

"Well $178,000 would be two police officers, or a police officer and a firefighter, and we're already at bare bones."

No new hearings are currently scheduled on HB 5, but northeast Ohio mayors pledge to fight the legislation, hoping to make it more "revenue neutral" to already stressed city budgets.

Orange Village Mayor Kathy Mulcahy encouraged residents to contact their state representatives, urging them to oppose HB 5 in its current form.

Mayor Mulcahy warned taxpayers that if the legislation passes, they'll be faced with higher taxes and cuts in city services to make up for the lost revenue.

"This may look like an efficiency program at the state level, but it's a pushing down of the burden to the local communities," said Mulcahy. "That's where the burden will be felt and where the taxes will be coming from."

 

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