When resident Rebecca Jemison won the 11-state Mega Millions jackpot in early January, South Euclid officials couldn't collect $1.4 million in income taxes because the city charter didn't specify that lottery winnings were subject to local taxes. "We were obviously disappointed," says law director Michael Lograsso. "It's not like it was being incorporated into the budget, so it was something we never expected, something we thought we might get for a little bit, then subsequently never got."
The Cleveland suburb, which recently laid off six employees and cut its budget from $16.5 million to $13 million, certainly could have used the money for much-needed repairs in infrastructure and recreation equipment.
A similar case back in 1996 had prompted the Regional Income Tax Agency to send out a notice to all of the Ohio municipalities it serves encouraging them to add lottery winnings as taxable income in their charters. However, the previous administration in South Euclid chose not to act, Lograsso says, and now the city is feeling the effects.
Other Ohio municipalities are wasting no time amending their charters now. As for South Euclid, "we've already written it into the charter," Lograsso says. "We changed it right after we learned we couldn't collect the money."
