City seeks state help in collecting overdue taxes
An increase in income tax delinquencies is prompting Pickerington to look for help from the Ohio Attorney General's Office to collect on overdue accounts.
City Finance Director Chris Schornack indicated Feb. 6 that income tax collections were down 17 percent in January. At that time, he suggested the city enlist help from the state to collect on the back taxes.
Pickerington City Council's finance committee voted unanimously earlier this month to approve a debt-collection agreement with the Ohio Attorney General's Office. Schornack said the proposed agreement, if approved by the full council, will bring needed revenue to Pickerington's coffers without costing the city a dime in collection fees.
Under the proposed agreement, the 10-percent collection cost "is borne by the delinquent taxpayer, not the city," he said.
Schornack said Pickerington contemplated using an outside collection agency called CCA for the task in 2012 but decided against it.
"We felt it was cost-prohibitive due to the fees associated with their collection process," he said.
Those who owe back taxes to the city could also lose any refunds they might get on their state income taxes because the deal with the Ohio Attorney General's Office would allow Pickerington to apply a person's state tax refunds toward delinquent city taxes.
"This is not a resource the city would have access to otherwise," Schornack said, adding that Pickerington could also rely on the state of Ohio for its other collection needs.
"The attorney general program is unable to collect utility costs, but I foresee the mayor's court utilizing this service as well to assist with delinquent court fees," he said.
Schornack said delinquent taxpayers would first be notified by letter that their debts are on file before the Attorney General's Office commences the collection process. He said collections could start in April if council approves the agreement.
Schornack attributed the reduction in tax receipts so far this year in part to the lingering effects of an economy that remains at a standstill.
"I also believe that the collections trail the economy and we are beginning to see the effects of stagnant (or) decreasing household incomes," he said.
He said the month of April will be a benchmark to measure the city's progress in terms of recovering revenue.
"April will be a key month for collections and should give us a good perspective of how annual collections go," Schornack said. "Over half of the income tax revenues for the year are receipts by the end of April."
He said he would prefer to use the Attorney General's Office to collect on "stale accounts" -- those that are three years or more past due -- and have the city continue to collect on the newer accounts through Pickerington Mayor's Court.