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Payments in lieu of taxes

January 24, 2013 - Rob Weaver
Tiffin City Council member Jim Roberts has broached the subject of a fee for students from out of town. Such a fee potentially could be charged to anyone, from preschoolers through college students, who benefits from city services but does not pay income tax.

As Roberts mentioned during the council meeting Monday, such a fee -- known as a payment in lieu of taxes -- has been suggested in Bexley, a suburb of Columbus. There, a group of citizens was tasked with finding untapped sources of revenue to offset the loss of the estate tax.

One idea is a fee ranging from $5 a month for tots in day care for part of the day to $20 a month for colleges students who don't commute to class. It is projected to raise close to $490,000 annually, roughly equivalent to revenue from the estate tax, which can fluctuate from year to year.

The rationale behind the tax is that kids in a preschool, prep academy or college benefit from city services such as street maintenance and repair, and police and fire protection. If the council pursues this idea, members might have to be convinced such individuals aren't, in effect, paying their fair share.

Of course, how the fee would be collected is another matter. Even tax-exempt institutions such as our two universities would note their contributions to the local income tax, not to mention their payrolls. Plus, would the charge be tacked on to student fees or absorbed by the institutions? A fee of $200 a year per student on an out-of-town enrollment of 2,000 would add up to $400,000. And that's just one university.

Sure, that's quite an untapped revenue source. But can the rationale hold up? This could result in a difficult choice.

Online: The Columbus Dispatch story on the proposal in Bexley: www.dispatch.com/content/stories/local/2013/01/20/bexley-might-tax-students.html The report by the Bexley Alternative Revenue Task Force: www.bexley.org/public-documents/city-commissions-boards-committees/alternative-revenue-task-force/

 
 

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