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State budget could boost county sales tax collection

March 8, 2013
By TOM GIAMBRONI - Staff Writer , Morning Journal News

LISBON - The county sales tax would be cut by 20 percent under Gov. John Kasich's proposed state budget, but the end result will be more money if the tax is expanded to services.

"I think what it would mean for Columbiana County is if we follow through with the governor's plan we would see a reduction in our sales tax at the county level ... but then our sales tax receipts could actually increase," said county Commissioner Tim Weigle.

The county has a combined sales tax of 1.5 percent, which is on top of the 6 percent state sales tax. Under Kasich's proposed two-year state budget currently being considered by the state legislature, the county's sales tax would be reduced to 1.2 percent - a 20 percent cut. To offset the loss of revenue, Kasich is proposing the sales tax be expanded to include most services.

Chief Deputy County Auditor John Goempel was asked to perform an impact analysis, and he projected that under the governor's plan county sales tax collections would increase from $14.5 million in 2012 to $16.1 million, provided sales tax collections grow by the 6.5 percent annual growth estimate being used by the Kasich administration.

To protect against any losses, the bill includes a provision guaranteeing counties would receive a minimum 10 percent increase in sales tax revenue from December 2013 through November 2014 and a 5 percent to 15 percent increase from December 2014 through June 2015, with the money coming from the state.

"I have no idea how they are going to guarantee that," Weigle said.

The proposal obviously concerns commissioners since the county sales tax is their chief source of funding, accounting for 65 percent of all county general fund revenue. Besides commissioners, the county general fund operates the sheriff, jail, courts, prosecutor's office, veterans services, and auditor, treasurer and recorder's offices.

Weigle said the governor's plan also raises other questions, such as whether the legislature has the authority to reduce county sales taxes, whether they be approved by voters or imposed by commissioners. The county has one of each. The legal thinking is that since the legislature passed the sales tax law in the first place, it can make modifications.

The plan also creates a three-year moratorium on county sales taxes (from July 2013 to June 2016), and Weigle said they are concerned whether this would prohibit them from placing the 1 percent tax on the ballot for renewal during this period. The 1 percent sales tax is set to expire in 2015.

"I don't think anyone has a definitive answer yet on whether that is so," he said. "We're going to have to see how this shakes out" in the legislature.

Commissioner Mike Halleck agreed. "I think a lot of what's being reported won't be in the final draft," he said.

Kasich's proposed budget also calls for a 10 percent increase in state Local Government Funding (LGF), which is the pot of money the state gives counties annually and is shared with cities, villages and townships.

The county's combined LGF allocation (half of which goes to commissioners) is scheduled to be $2.24 million this year, a reduction of 52 percent from as recently as two years ago. A 10 percent increase would result in an additional $224,000 in combined funding over the next two years.

These topics and more will likely be discussed Monday at the Spread Eagle Tavern in Hanoverton, where the County Commissioners Association of Ohio is hosting a regional legislative briefing for commissioners and state legislators from Columbiana and Mahoning counties.

 
 

 

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