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Kent Tracks Income Tax, Not Worker Status, on Construction Projects

Officials say tracking of income tax payment an imperfect system; no method in place for checking legal or illegal status

How Kent tracks construction workers and their income tax payments is an imperfect system, city officials say, and it depends largely on contractors doing "the right thing."

The issue came to light Thursday after a revelation that 23 undocumented workers from Mexico and Central America were working on a private student housing project in Kent. Tthe workers were employed at , a 596-bed student housing construction site on South Lincoln Street owned by Columbus firm Edwards Communities Development Company.

The city keeps tabs on whether a reported worker is paying income tax on their wages, but it does not keep an eye on whether all workers are reported or if there are undocumented migrant workers at construction sites. Under federal law, business owners — in this case, construction contractors — are required to verify whether an employee is legally allowed to work in the U.S. and file the appropriate tax forms.

"We don’t actually perform any role in terms of the individual’s work status, whether or not they’re legal or illegal," Director Dave Coffee said.

What Coffee's office does try to keep a close eye on is how much income tax is paid either individually by workers or a business entity operating in Kent.

"We do have processes in place certainly to try to, first of all, inform contractors of their tax obligations, and secondly to set up some processes by which we attempt to enforce their adherence and compliance with those things," Coffee said.

That process starts at the , where contractors who obtain building and construction permits must file certain information pertaining to number of employees on a job and the contractor's dollar value of their portion of the construction job.

"Any contractor that comes in and pulls a permit is told they are required to file income tax information," said Bridget Susel, acting head of the community development department.

The development department takes the tax information and passes it on to the finance department, which then forwards it to the Regional Income Tax Agency. Kent contracts with RITA for income tax collection services.

Both Coffee and Susel concede that it's an imperfect system, and some contractors can slip through the cracks. In the Province case, the project has had 62 different sub-contractors working at the site.

"It is by and large predicated on people doing the right thing,” Coffee said. "Sometimes subs have subs. Not all of those certainly are subs that have payrolls as such, depending on their size and amount of the project they’ve got."

Susel said the city conducts spot checks to see if employees are paying income tax on their wages, but the city only does those checks on prevailing wage projects that include state or federal money and are bid by the city. It's a limited number of projects compared to Kent's construction boom, and those checks only cover one or two employees on a job.

"You could not physically interview every worker on a job" because the city lacks the manpower to do so, she said.

Those spot checks exclude private projects, such as the Province construction. The city's downtown construction with development partner Fairmount Properties does not include any state or federal money directly, so it would not be subject to such checks, Susel said.

And the downtown projects managed by (new hotel) and (transit center) also aren't subject to spot checks. It's up to those agencies and their contractors to keep an eye on the employment eligibility of the crews building the new buildings.

Coffee is confident the system works for the vast majority of contractors.

"What can be said with a degree of confidence is that, overall, the construction activity in Kent has had a definite positive impact on our income tax revenue," Coffee said. "During 2011 we experienced an overall growth rate of 2.48 percent, or $258,734, over our 2010 fiscal year income tax collections. During this same period we actually saw a decline in income tax revenue derived from the public education sector, including (Kent State) and Kent City Schools, which traditionally have been the source of a significant portion of our total income tax receipts."

The city hasn't identified any similar problems with other construction projects, he said.

Like Coffee, Susel is confident Kent's system of tracking construction workers' income tax payments works. She believes the situation with the Edwards Communities apartment project was the exception and not the rule for Kent construction.

"It was an anomaly," Susel said.

Teresa K. March 24, 2012 at 01:19 PM
This article is so funny. I dropped my son off at campus about a week ago and we passed the Province construction site. He commented: "I'm guessing those are illegals working there? " And then this article pops up. We passed the work site yesterday and noticed some Amish guys working.
Lightnapper March 24, 2012 at 08:31 PM
I'm originally from Brimfield. I worked the vegetable fields at Seifiert's Farm back in the 1960's with Kent State students, and then in construction in "rust-belt" Akron until I was worn-down by layoffs and persistent poverty. I was forced by simple economics to move 3,000 miles to a large, indifferent city to obtain additional education and consistent employment. But I did it legally. From what I've seen happen to this city over the last 37 years, I'd say you're a perfect candidate for Los Angeles. Come on, you can live with people who only "migrate" to the US to make money and to "bleed the system," and who have no real interest in America and what it stands for beyond that-- money. They won't even learn English, as my grandparents did to assimilate and succeed. Why bother? You don't need to. You don't even begin to understand the "scope" of the problem presented by illegal immigration in America. But trust me, you will. We have laws for a reason. And many of them were broken on that jobsite by the contractors, employers, and workers-- "illegal," undocumented workers. Your blind insolence reminds me of a Thomas Hobbes warning. In the absence of political order and law, we would all live in a "state of nature" where freedom for all-- by all-- would result in a "war against all"-- free to do whatever, whenever, to whomever. Sounds ideal.
skokisok March 25, 2012 at 11:02 AM
I have to agree with Teresa. This article is a laugh a line. The city tracks the income taxes because that is all they are interested in. That is why they skirted zoning regs. to allow this place to be built in the first place. Money in the coffers is what counts. Coffee and Susel believe the system works? An anomaly? Obviously not,I'll give you 23 reasons why it didn't work. At least the illegals were doing something constructive and earning their pay, unlike Susel and Coffee. Maybe we should let the Mexicans stay and ship Susel and Coffee off the Mexico.
Lightnapper March 25, 2012 at 07:39 PM
@Pie-in-The Sky Gwynes... Just dandy-- so breaking the law to make money is ok because we live in a capitalistic country, as long as we are all very polite to each other and semantically correct? Hope you're not an educator, and, if so, I sure hope you don't teach law, political science, economics, or logic. I'm betting English, Religious Studies, or Philosophy. And Yuma "ain't" LA-- maybe an entry point, but certainly not a destination. Come and actually see what has happened here-- socially, economically, educationally, morally, and ethically-- over the last 10 years before you spout geographic pedigree and mount the pulpit spewing the moral high ground. Oh, and not to bury the social pleasantries under pointed debate and in keeping with rabid political correctness and a very obviously Anglican Christian ethic-- "Have a nice day. It's raining gatos-n-perros here. How is the weather there?"
Sonia Gwynes March 25, 2012 at 10:22 PM
What a stunning array of unsubstantiated assumptions.

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