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Posted: 7:58 p.m. Friday, Feb. 8, 2013
Staff writer
Butler and Warren counties would receive $6.2 million in additional sales tax revenues next year under Ohio Gov. John Kasich’s budget plan, but some county leaders fear a loss of local control.
The new revenue — which works out to be $3.2 million for Butler County and $3 million for Warren County — is thanks to increased tax collections expected to result from newly taxing services like haircuts, cable TV and legal services that had previously gone untaxed.
Under a state guarantee, backed up by the increased tax collections, counties would receive at least 10 percent growth in sales tax revenues in 2013, another 10 percent growth in 2014, and 15 percent in 2015. But the broadening of the base would be accompanied by a mix of statewide and local cuts and a temporary moratorium on counties’ abilities to change their tax rates. Without the rate cuts, the broadening of the sales tax would equate a “massive tax increase,” Ohio Tax Commissioner Joe Testa said earlier this week.
All told, Warren County shoppers would se a 0.85 percent rate cut, while Butler County’s rate would be cut by 0.54 percent, according to a newspaper analysis of information released this week by the Ohio Department of Taxation.
Butler County Administrator Charles Young said the jury’s still out on Kasich’s tax plan.
“The short answer is that it remains to be seen,” Young said. “This is all very new information, and it’s actually a very complicated subject.”
Sales taxes are a key source — and in often cases the largest source — of revenue for county governments across the state.
County commissioners statewide are encouraged by the prospect of additional funding, but concerned about the implications of other elements of the plan, including a loss of local control, said Larry Long, executive director of the County Commissioners Association of Ohio.
For instance, Kasich’s plan calls for a freeze of local sales tax rates for the next three years. That would prevent counties with expiring sales tax levies from renewing them, or from lowering the rates themselves.
The new funding would still likely not make up for recent state cuts in other revenue sources, Long said.
“Frankly, there’s more unanswered questions before we come to a definitive answer on this one,” Long said.
Kasich’s sales tax plan is part of his larger, ambitious budget plan, which also calls for an overhaul of Ohio’s school funding formula, an expansion of Medicaid, income tax cuts for all Ohioans and raising tax on the oil and natural gas industry.
Sales tax changes
Area county sales tax rates under Gov. John Kasich’s budget plan
County Current rate New rate
Butler 6.25% 5.6%
Hamilton 6.50% 5.65%
Preble 7% 6.2%
Warren 6.5% 5.65%
Source: Ohio Department of Taxation
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