Niles deciding whether to outsource income tax collection

regional income tax agency rita_386179

NILES, Ohio (WKBN) – It appears Niles will have a five-year plan — which includes outsourcing income tax collection to an agency outside of the city — to get out of fiscal emergency. But not everyone agrees with it.

The plan would replace the Niles Income Tax Department with the Regional Income Tax Agency, known as RITA.

“The mayor really feels that this is one of the most beneficial things for the city to do,” said Service Director Ed Stredney.

Bob Ward, president of the AFSCME Local 506 — a union representing the income tax workers, said he’s not in agreement with it.

He showed WKBN a grievance from 2016 — which the union won — preventing RITA from taking over.

Ward said they’ll file another grievance if need be.

“We didn’t want to lose another service that we provide here for our taxpayers because at least our people here can walk people through the tax procedures if they need help.”

Stredney said contracting with RITA could mean an extra $400,000 a year in tax collections — a figure Tax Director Lisa Smathers disputes.

“We have some Excel sheets that show our figures that they will lose money by going to RITA, but certainly not a savings and there’s certainly not $400,000 out there to be had. Never in a million years,” she said.

Girard, which is similar in size to Niles, has used RITA for income tax collection since 2004 when it was in fiscal emergency.

Girard Mayor Jim Melfi said the city saw an 11 percent increase in tax collections the first year. He has no regrets in contracting with RITA.

“It worked out entirely well for us. I couldn’t imagine it wouldn’t work out for Niles,” Melfi said.

Another issue of contention with the mayor’s revised fiscal plan is the proposed $10 license fee increase, which Councilwoman Linda Marchese had questions about.

“Do they want the roads fixed? Yes, they do. Can they afford to pay extra money without any input was their concern,” she said.

With the state commission overseeing Niles’ fiscal emergency threatening a 15 percent cut across the board if there’s no viable recovery plan by July 25, Councilman Steve Papalas saw no alternative to the plan presented by Mayor Tom Scarnecchia.

“I’m not going to risk a 15 percent reduction, that’s what the whole issue is — over our heads right now,” Papalas said.

If Niles City Council’s voting pattern continues the way of the first two readings, Monday’s final vote should be 5 to 2 in favor of the plan.


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