LIMA — Members of Lima City Council on Monday will take up consideration of a resolution voicing strong objection to proposed changes to Ohio’s municipal income tax laws.
House Bill 601, known as the Municipal Income Tax Uniformity bill, was introduced Oct. 30 and assigned to the Ways and Means Committee. Introduced by state Reps. Cheryl Grossman, R-Grove City, and Mike Henne, R-Vandalia, the bill was sold to state organizations like the Ohio Municipal League as a way to create uniformity in municipal income tax procedures across the state.
“We entered into these marathon negotiations in good faith with groups wanting to change the way our local taxes operate,” said Susan Cave, executive director of the Ohio Municipal League. “What is the product from these discussions obviously, in no way, reflects what we would consider to be balanced, with revenue impacts to local revenues kept to a minimum.”
The current proposal would require municipalities to administer a five-year net operating loss carry-forward policy for individuals and business filers, changing the rules for determining and enforcing residency requirements and severely restricting the ability of municipalities’ enforcement efforts, among others.
“Our municipalities are trying to adjust to reductions in funding that were part of the last state budget through cuts to the Local Government Fund, an accelerated phase-out of promised tangible personal property reimbursements and eliminating the estate tax,” Cave said. “To continue to assault the ability of municipalities to provide services to residents and businesses just doesn’t make sense.”
In the resolution up for City Council consideration, it notes Lima has lost $750,000 in local government funds and stands to lose another $750,000 in revenue from the loss of the estate tax.
“We are hopeful that members of the General Assembly will agree with us that strong communities are vital right now for the economic strength of all of Ohio and creating safe environments for families in which to live,” Cave said. “This is not the time to gut city and village budgets.”