Lisbon would save $8-$12K using RITA
LISBON –The village would save at least $8,000 a year by switching to the Regional Income Tax Agency and likely increase tax collections, according to company officials making a presentation at this week’s village council meeting.,
Matthew Mau told council and about 20 non-officials in attendance that using RITA to collect the 2 percent municipal income tax in place of the village tax office would save Lisbon an estimated $8,000 to $12,000 per year.
The savings are based on it costing the village an estimated $50,000 a year to resume operating the tax collection office with a full-time administrator. This is bit higher than the $44,000 spent on the office in 2018, which is the last full year village employed a full-time tax administrator.
“We based that on whatever information the municipality provides,” Mau said of the $50,000.
Mau said RITA charges an upfront fee of 3 percent for every payment it receives, including delinquent taxes. Each year, the company performs a rate-adjustment study to determine the actual cost, and the majority of communities end up being reimbursed, with some end up being charged more than 3 percent. The average was 1.4 percent in 2018, the most recent year figures were provided.
In Lisbon’s case, RITA estimated contracting with the non-profit would cost the village $37,800 to $42,700 based on income tax collections of $1.53 million, or 2.5 percent to 2.8 percent.
RITA is a non-profit agency created in the 1970s under Ohio law by the Council of Regional Governments to provide municipal income tax collections services to cities and villages. Seven communities in Columbiana County contract with RITA: Columbiana, Wellsville, East Palestine, Leetonia New Waterford, Salineville and Washingtonville. About 40 percent of all municipalities in Ohio use RITA.
Salem City Council has voted to switch to RITA but that has been put on hold because opponents there are trying to put the issue on the ballot for voters to decide. Lisbon is also considering contracting with RITA after council fired it’s part-time administrator in January for failing to show up for work.
Some council members and other village officials had already met with RITA officials and visited its local office, but council wanted to give the public a chance to ask questions by inviting representatives to attend the meeting.
While some of the questions were based on erroneous information picked up on Facebook and elsewhere, most of the public’s questions were about how switching to RITA would affect them.
First off, if you work in Lisbon you do not have to do anything because your taxes on earned income are already withdrawn by your employer and sent along to the village, Mau said. RITA would mostly affect Lisbon residents who work elsewhere, and he said state law requires they file their taxes quarterly if their estimated tax liability for that three-month period exceeds $200.
Mau said they can help you do this through its electronic filing and payment system. In addition to its variety of online services, RITA offers taxpayers around-the-clock access to their accounts as well as an automated phone system to check on the status of their estimated payments, refunds or balances due. There are also RITA customer service representatives taxpayers can speak with by phone during work hours and expanded hours and days during tax season.
Communities are also encouraged to designate an employee or two to serve as RITA liaisons, with these persons trained to answer questions and provide other basic assistances should anyone stop by or call village hall. Wellsville Fiscal Officer Hoi Black attended the meeting and was asked by Councilman Tom Darcy if she helps citizens with their forms.
“All the time,” she said.
Each liaison is also assigned a specific contact person at RITA so they will always be speaking with same person whenever the liaison has a question.
Council President Dawn Thomas said this additional responsibility of serving as a liaison could prove a hardship for their fiscal officer, Tracy Wonner, who is the only full-time office staff person in village hall and also serves as council clerk.
“Tracy has her hands full with what she has to get done,” she said.
It is up to the village whether they want an employee to become a trained liaison, with some communities opting to retain an employee from the tax department to perform that function, Mau said.
During tax season a RITA community in every county is chosen — it is Columbiana this year — to have a staff person available on a designated day so taxpayers from any of the RITA communities can stop by if they need help. Officials indicated they are open to holding one just for Lisbon residents the first year.
Councilman Ryan Berg asked if the village has the option of waiving any late fees or penalties, and Mau said they do, or the community can give that authority to RITA.
Mau said half of taxpayers in RITA communities file their taxes online, but Darcy asked about the options for people who do not have a computer? Mau said they can always obtain a copy of what they need by calling RITA, visit their liaison or attend the tax day event. Wellsville’s Black said she prints out RITA tax forms for people to pick up at village hall.
One of the chief benefits of going with RITA is it has access to a variety of means to find taxpayers, and this usually increases tax collections. Black said several years ago delinquent taxes ballooned to $180,000 but RITA cut that in half within two years.
Council took the matter under advisement and is expected to make a decision soon, perhaps as early as its next meeting on March 10.