Canal Winchester Mayor Michael Ebert is among representatives from 16 communities who signed a letter to Ohio Tax Commissioner Joe Testa, protesting a proposal that could switch the responsibility for collecting local income taxes from municipalities to the state.

Canal Winchester Mayor Michael Ebert is among representatives from 16 communities who signed a letter to Ohio Tax Commissioner Joe Testa, protesting a proposal that could switch the responsibility for collecting local income taxes from municipalities to the state.

Finance Director Nanisa Osborn told Canal Winchester City Council at its April 16 meeting that the proposed state legislation is "of great concern to me and my contemporaries."

She asked that council "consider contacting the state in opposition to this legislation."

Council took no action on Osborn's request Monday, but Councilman Steve Donahue said members "would like to read any other documents that she can provide and will consider drawing up a position paper to submit."

The letter to Testa that Ebert signed said if the state takes over collection of municipal income taxes, the communities believe they will "lose the ability to manage cash flow, enforce collections and efficiently manage income tax collections."

Canal Winchester's primary revenue comes from its municipal income tax, according to Osborn, and the city currently contracts with Columbus for collection of those taxes.

"We get a distribution of income tax funds monthly from what is collected by the city of Columbus," she said. "Currently, Columbus collects about 2 percent for their collection fee. Columbus follows up with taxpayers who do not comply and then, when necessary, they turn them over to us for further action.

"I'm concerned that the state is saying they'll charge a much higher rate and (that) may become a very detrimental situation for us if they don't distribute in a timely manner."

According to State Tax Commission spokesman Gary Gudmundson, the Ohio Chamber of Commerce and state accountants' organization told Testa there is a need for uniformity and centralized collection of municipal income taxes.

"This administration has a commitment to working toward an economic climate that fosters business and job creation," Gudmundson said.

Osborn said Canal Winchester is not confident about the agency's ability to meet its obligations to the municipalities and taxpayers to create such a climate.

"Obviously, we've been on a monthly payout so our cash flow would be greatly affected, and income tax is our single largest source of revenue," she said.

In regard to enforcement, Osborn said city officials are concerned about "how we receive information and the timeliness of that, as well as which tax code they're enforcing - is it Canal Winchester's code or is it a more general set of codes that are similar but not the same?"

"Right now, if someone comes to me and says they broke their arm and can't work for six months but I know I owe taxes, I can work out a payment plan with them. But I don't know if we'll have that ability with the state collecting."

For individuals who do short-term work in Canal Winchester, Osborn said, she is concerned the state would not properly enforce tax payments to municipalities.

"The upshot is that our three main concerns are enforcement, the distribution of funds and timeliness of funds and enforcement," she said.