Only 2 show for sales tax hearing
LISBON — Only two people showed up at Wednesday evening’s public hearing on the 1 percent county sales tax, but their presence sparked a lively discussion with county commissioners about what is the fairest tax of all.
The sales tax expires at the end of 2020, but commissioners decided to seek its renewal early and place it on the Nov. 5 ballot. Before they can do so, they must hold two public hearings.
Commission Chairman Mike Halleck started the meeting by pointing out how important the tax is to county operations. The 1 percent tax, along with a 0.5 percent county sales tax imposed in 2007 by their predecessors, generated a combined $15.7 million last year,, representing more than 70 percent of the county general fund’s operating income.
“Obviously, it’s important we continue to have it to operate the county in an efficient manner,” he said.
John and Sally Dyce were the only members of the public at the hearing, and Halleck asked them if they would wish to comment about the tax. Dyce, who has twice run for state representative, said while he is not necessarily opposed to the tax, he believes it is an inherently unfair tax because of the impact on poorer citizens or those on fixed incomes, such as the elderly, because they have less money to spend.
“If you gave them a 1 percent break on the sales tax that would be huge. I know you can’t do that” but the state legislature should come of with a more equitable way to fund government operations, he said.
“You’d be a really popular guy if you could figure that out,” Commissioner Jim Hoppel told him.
Hoppel pointed out commissioners have done what they can to minimize the impact on residents by agreeing in 2005 to quit collecting 2 mills in property taxes in exchange for voters renewing the 1 percent sales tax that year, which they did, and they have continued to honor that pledge. The owner of a $100,000 home is paying $61 less in property taxes as a result.
“That 2 mills now brings in $4 million a year that we gave back,” he said. The 2 mills would actually generate $3.5 million per year for commissioners, according to the county auditor’s office.
Dyce, who is contemplating running for commissioner next year, said the problem with the sales tax is lower-income households end up spending a higher percentage of their disposable income then those who are more well off. Then he provided a couple of hypothetical examples of people at opposite ends of the income scale to prove his point.
He also referred to a hand out that showed the top 1 percent of earners ($419,000-plus) pay 5.4 percent of their salary in sales tax, while the lowest 20 percent ($18,000 and under) pay 10.9 percent. The newspaper did the math and determined that 5.4 percent comes out to $22,626 for the households in the top 1 percent and $1,962 for those in the bottom 20 percent.
Halleck said he does not dispute what Dyce was saying, but he pointed out the sales tax in Ohio does not apply to groceries. Also exempt are such things as prescription drugs, most utilities and gasoline (although there is a separate state fuel tax, which was just increased starting July 1).
Halleck believes the sales tax to be a fair tax because those who spend more pay more, and most people — to a certain extent — can control that by what they purchase. “I would prefer a sales tax because you only pay it on what you can afford,” he said.
Dyce believes the income tax is the fairest tax of all.
Commissioner Tim Weigle weighed into the debate by going back to Dyce’s hypothetical household examples about how the person making less ends up paying a higher percentage of their income with a sales tax. He pointed out that the hypothetical low-income household Dyce cited would end up paying no income taxes, whereas the higher income person still does and they both would end up with about the same amount of disposable income.
Fifty of Ohio’s 88 counties have a 1.5 pretence county sales tax, which is the most that can be assessed. An additional 0.5 percent county sales tax can be sought to fund public transportation, but commissioners said they have no intention of ever doing that.
Weigle said while no one really likes paying taxes, he believes commissioners have been good stewards of the tax dollars given them and promised to continue acting in a fiscally responsible way.
The second public hearing is scheduled for 9:30 a.m. Wednesday.