(LFC Comments: We are happy to provide a forum to local activists that work tirelessly on behalf of the citizens of their community. Check out how the ‘Euclid Citizens In Action’ group made their voices heard.)
R.I.T.A. – A Bad Idea
Written by Jeffrey Beck – Euclid Resident
In another timeline 5 Council people, the mayor, and the finance director would be patting themselves on the back and high fiving each other over the move to RITA and the extra $2M plus the city credits them to collecting.
I said in another timeline.
Our city DID collect an extra $2M plus over last year, but RITA didn’t figure into it. Let me back up for a moment. When our new City Council president took her position in January, 2018 an extensive financial review was done to find ways to increase revenue.
Our city had just lost $1M a year when Cleveland raised their income tax.
Even before that we were struggling financially as a city. I brought up recouping the shared income tax as a possible solution. The majority Council refused to discuss it.
Instead, they placed 2 income tax increases on the ballot for Nov. 2018. The first was a property tax levy to raise $2M to fix roads. The 2nd was a charter change to alter the 100% income tax credit for monies paid to other cities to as low as 50%.
Euclid is one of the most overtaxed cities in Ohio, and our residents simply cannot afford more. Our group, Euclid Citizens in Action (funded by our PAC RECET) mobilized to fight these levies. We, as a city, do need more money, but Council’s refusal to discuss the shared income tax, to us, is unconscionable.
We successfully defeated both these tax increases in November, 2018.
Shortly after the administration decided to move our tax department from in house to RITA, a Council of Governments organization that collects income taxes for 300+ cities. The main reason for this was the city’s claim that we aren’t large enough to receive the Federal Tax Information (FTI). Instead, we receive the State Tax Information (STI). The finance director claimed that we were missing out on an additional $1M per year in uncollected delinquent taxes due to our not accessing the FTI (a figure that ballooned to $3M during the campaign).
This was something that was never brought up during the extensive financial review of 2018.
This legislation was sent to committee in late 2018 where, in early 2019, a meeting was held with presentations from RITA, CCA (another tax collector) and our own tax dept. The claim of uncollected taxes totaling $1M was brought up. The representatives from CCA stated this was untrue and that there was “no pot of gold at the end of that rainbow”. A vote was taken and 5 members of council voted to keep it in committee and not move it forward for a vote.
This lasted about a week. Then rumors circulated that one of the “no” votes was going to change his vote to “yes” and move the legislation forward. This was very confusing as this Councilperson’s ward was one of the poorer in the city, and whose residents frequently utilize our tax dept’s services.
Several people (including myself) met with this Councilperson to try and convince him that he should remain a “no” vote. A committee meeting was reconvened, he changed his vote, and the legislation was moved to the full council for approval.
During that Council meeting in early February, several residents voiced their displeasure at outsourcing our tax dept. to RITA. Our reasons were many. Poor customer service, higher costs, becoming a number instead of a name. And most importantly, the STI accesses the FTI. We add an extra step in to get the information.
I spoke and said that if Council was going to turn their backs on the residents then when the vote was being taken, I would stand and turn my back on them. I also encouraged anyone who felt the same as me to do the same. When this vote was taken the vast majority of the 50 or so residents in the audience stood and turned their back on council.
RITA was passed by a 5/4 margin.
During resident comments at the end of the meeting, our group announced a referendum petition to stop Council from enacting this legislation. We knew we had 30 days to gather 1800 signatures of registered voters to have this legislation placed on the November 2019 ballot.
And it was the dead of winter! Well, 29 days later we turned in 2300 signatures, and were able to have the RITA issue placed on the ballot.
The following month a financial work session was held in our law conference room. These sessions are not filmed and no minutes are kept. But the public is allowed to attend. We were there and audio taped this meeting.
The finance director stated at the beginning that since RITA wasn’t moving forward, we need to talk about the $1M overpayment to the schools on the shared tax. It seems that the city had figured the income tax split incorrectly, and we had been over paying the schools $1M per year for up to 24 years.
The mayor stated she was made aware of this while preparing the 2018 budget. Since that preparation took place in late 2017 then the mayor admitted knowing about this overpayment while Council was doing their extensive financial review in early 2018.
A review that resulted in putting 2 tax levies on the ballot. It was stated that the city had changed the split effective 1/1/19 and were giving the schools $1M less. Interestingly, the mayor knew this in late 2017 and allowed the overpayment to continue during 2018.
This in a cash strapped city. It dawned on me that this was the $1M they were going to credit to RITA. But they denied that.
This campaign pitted the majority of Council and the administration against the minority of Council who voted against this. The campaign was on. At times it became very contentious as some on council, and in the community, put out misinformation in order to get people to vote for RITA.
On November 5, 2019 the voters spoke and turned RITA down 63% to 37%. But getting back to the timeline I stated at the beginning. We have collected over $2M more in taxes than 2018. $1M of it is the recouping of the school overpayment, but the other $1M is mostly from the one area that increases taxes to the city without increasing resident taxes – economic development and a great economy.
That’s the way to increase revenue, and I hope those on Council, and in our administration, would put their efforts there and not in these desperate ideas
The citizens are patting themselves on their backs and high fiving themselves.
This increase was managed by our own tax depot with our own people.
(LFC Comments: Bravo to the Euclid Citizens in Action group for taking the initative to ensure that the will of the people was heard by the elected officials.)