* To move forward with outsourcing the city income tax collection process.
RITA income tax collection
City officials authorized an agreement with the Regional Council of Governments to outsource municipal income tax collections to the Regional Income Tax Agency (RITA), emphasizing that the agreement becomes effective in July of 2025.
“What that means for our residents is that people filing their 2024 income taxes will not be impacted, unless it is filed after that July 1 date,” Springfield City Finance Director Katie Eviston explained.
She offered assurances that customer service will remain a priority and that the city will continue to employ a person assigned to work with citizens and serve as a liaison with RITA on their behalf.
Between money saved by outsourcing the city income tax department, estimated at $400,000 per year, and the expected additional money RITA will be able to collect, city officials say the move provides improved efficiency and economic advantages.
City officials say since remote work became common during the COVID pandemic, municipalities have experienced a loss of income tax revenue, as not all companies have collected and shared local taxes that are payable to the cities where workers reside. RITA will have access to federal tax filings the city did not have, and can identify and seek payment from those who have not paid municipal income taxes to the cities where they live.
At the Dec. 3 commission meeting, a city employee who advocated for any staffers who might lose their jobs, estimated that about 12 workers’ positions would be eliminated by the move, citing communication from City Manager Bryan Heck.
But this week, city officials said only six jobs are being eliminated, not 12. The city provided Heck’s Nov. 21 email to the affected departments, which said the city was planning a restructuring of internal operations, adding, “While many positions will be affected, the city is still in the process of finalizing what this restructuring will look like.”
On Friday, city officials said that restructuring will result in the elimination of six positions.
The decision to outsource the income tax collection function was not taken lightly, Eviston said.
“It’s a decision we arrived at after years of careful analysis and tough conversations … we know that eliminating internal positions is not just a line item on a budget. It impacts people,” she said. “But as stewards of public resources we have a duty to face challenges head on and make choices that secure our community’s future … Our income tax is our life-blood. It’s essential to carry out the services that we provide for our community.”
“This is a July 1, 2025 impact,” Eviston stressed. “We wanted to give the folks impacted the most amount of time possible to find positions internally with the city, which is ongoing, or externally as they decide what is best for them.”
In advance of the commission vote, during the public forum portion of the meeting, one city resident criticized the outsourcing and questioned the timing of the decision, which appears to coincide with a unionization effort among city workers.
Credit: Bill Lackey
Credit: Bill Lackey
Data Center tax abatement OK’d
City officials authorized an Enterprise Zone Agreement with 5C Data Center USA that puts in place a 15-year, 100% property tax abatement that both city leaders and the Clark-Shawnee School District see as a good investment.
The data center will be located in the former LexisNexis facility across from PrimeOhio Corporate Park, along with an expansion. Owned by a Canadian company, 5C Data Center USA plans call for development of a data warehouse and at least 100 tech-related new jobs.
Springfield Economic Development Director Tom Franzen told commissioners after their vote on the measure that, “The overall investment is up to $1.3 billion, assuming they have some opportunities to grow, which they have identified and I think are real. They are adding 147,000 square feet of space to that facility, adding 100 jobs and about $12.7 million in new payroll.”
Franzen also noted that the new company helps diversify the economic base of the Springfield area and may help attract additional technology-related opportunities.
The Clark-Shawnee School Board agreed to the tax abatement for the project in November, with schools Superintendent Brian Kuhn saying Clark-Shawnee will benefit immediately and in the long-term as the company brings well-paying jobs, plans to partner with the school district for internships and introduces “cutting-edge business into our community.”
About the Author