Regional Income Tax Agency

Today I want to give you an update on R.I.T.A. – Regional Income Tax Agency.

When I was City Treasurer I did a two year analysis of the city’s tax department

versus the Regional Income Tax Agency. There were numerous meetings and phone

conferences with R.I.T.A representatives. I interviewed several municipalities both large

and small that were using R.I.T.A. I visited a few existing customers including Strongsville

and Sandusky.

I came to the conclusion it would benefit Bellevue to hire R.I.T.A. for three primary

reasons. It would lower the cost to the city. It would provide better service to local tax

professionals and individual taxpayers. Finally, it would increase total tax collection.

I believe all three objectives have been met.

The change to R.I.T.A. was made, with 2008 being the first full year of tax collection.

I am happy to report that the results are very positive.

The last year that Bellevue had a tax department the budget for that year was

$250,000.00.

In the six years of R.I.T.A’s services their bill has been substantially less. R.I.T.A.

charges a 3% fee for their services. They provide over 60 tax collection and system services.

If R.I.T.A. can collect the taxes for less than the 3% they give a rebate. Every year R.I.T.A.

has been successful in keeping their cost down and giving Bellevue substantial rebates. The

overall rate R.I.T.A. has charged is as follows:

RITA’s cost     City Tax Dept        RITA’S COST              SAVINGS
Costs

2009 2.33%           $250,000               $71,571                       $178,429
2010 2.16%            $250,000               $71,383                      $178,617
2011 1.86%             $250,000               $66,286                     $183,714
2012 1.84%            $250,000               $67,089                     $182,911
2013 1.78%            $250,000               $71,899                      $178,101
2014 2.06%           $250,000               $68,297                      $181,703

Total Savings                                                                              $1,083,475

Now if we assume the tax department budget remained the same which is normally not

the case, below is the approximate annual savings.

Tax forms can be obtained through R.I.T.A’s website. They are constantly working to

improve the ease of using their website.

Recently the Ohio General Assembly passed and Governor John Kasich signed into law

Sweeping changes to the administration of municipal income tax that will go into effect

January 1, 2016.

R.I.T.A. has already designed and structures the forms and provided them to Bellevue.

The city simply has to fill in their name and personalize information and present it to council for

approval. As Dave Wallingford, City Law Director, said at last council meeting, “this saves the

city a substantial amount of time and money by having R.I.T.A’s services”

But the best news has to do with the collection of taxes. R.I.T.A. has the ability to cross

check city tax returns with individual and corporate federal returns. It took R.I.T.A. several

years to convince the IRS to agree to this relationship because of the sensitive information. This

is a significant tool that municipalities that run their own shop do not have. Only R.I.T.A.

Why is that big?

Say John Doe works at ABC factory for 6 months then goes to work at DEF factory the

other six months. He turns in his 1099 for the earnings from his first job but not his second. A

City with its own tax department isn’t capable of knowing this information. This past year

alone R.I.T.A. was able to collect an additional $20,000 from being able to compare returns and

notify filer of this error.

They can also compare corporate returns. A recent comparison found a local corporation

hadn’t been paying their corporate tax. The end result, the city recently received a deposit of

over $700,000 of additional revenue. You read that right, over $700,000.

The administration and council have been discussing for some time how could we come

up with the $600,000-$700,000 needed for the East Main Street project that was coming up

shortly. Our prayers have been answered.

If you add it all up, the change to R.I.T.A. in the 7 plus years has been a savings of

almost $2,000.000.

Recently the Bellevue Central Park had their first concert in the park with Walt Sanders

and the Cadillac Band. As I sat there enjoying the music I couldn’t help but think if the change

to R.I.T.A. hadn’t taken place the city more than likely wouldn’t have had the $50,000 in

revenue that they have invested in the park. Nor would we be in a position to invest around

$175,000 in the upcoming bike trail that is bringing almost $1,000,000 in grant monies from the

federal and state.

RITA has lowered the tax departments cost and increased revenue. No other city

department can make that claim.

R.I.T.A. is a great example of creative ways municipalities can increase services and

lower costs. This is a growing trend across the country.

The word is getting around the State of Ohio. When Bellevue signed on to R.I.T.A. they

were their 130th city. R.I.T.A. recently announced they have now grown to over 250

municipalities. They have almost doubled in size in less than 8 years. Obviously they are doing

something right.