GENEVA — The numbers on Jim Pearson’s spreadsheet add up to a negative.
Line after line — the Local Government Fund, $213,000; the estate tax, $74,000; tangible personal property tax, $109,000 — shows the sweeping state cuts to the city’s precarious budget, and it isn’t going to get any easier, he said.
Pearson, who serves as the city manager in Geneva, said there is another obstacle looming on the horizon for local governments as state legislators mull House Bill 5, which proposes uniformity measures for municipal income tax by way of unfunded mandates and a big financial hit to the city’s general fund.
“The long-term purpose of House Bill 5 is state oversight of municipal income tax operations,” Pearson said. “That could lead to a future push for forced state centralized collection of municipal income tax.”
If passed, the bill would require cities and villages to repeal their income tax ordinances and adopt the state code to provide uniformity in tax forms and collection. Failure to do so would result in a state lockdown for tax collection, meaning the municipalities would not be able to collect tax dollars from residents and workers.
Pearson calls the local tax “the single largest revenue source for the city.”
“It provides essential municipal services,” he said.
City Council members recently passed a resolution opposing the proposed legislation, which notes the bill would reduce the municipal income tax to all Ohio municipalities.
The Ohio Municipal League executive director Susan Cave agrees with Geneva’s lawmakers.
“(It) will result in tremendous hardships through significant reductions in revenues and loss of critical local control for Ohio cities and villages,” she said.
Cave said uniformity of tax law and tax forms is not at question.
‘Let there be no mistake,” she said. “Our members are all for greater uniformity in the administration of the municipal income tax. The product in no way reflects what we would consider to be a responsible approach to achieve balanced uniformity, with revenue impacts to local revenues kept to a minimum.”