Kiss: How does new Lucas County sales tax rate really compare to other urban Ohio counties?Written by Guest Author | | GuestAuthor@toledofreepress.com
At their Jan. 20 meeting, the Board of Lucas County Commissioners voted unanimously to authorize a continuous (permanent) 0.25 percent increase in the Lucas County sales tax rate, which will go into effect on April Fools’ Day. This was the final step in a process that was first revealed by local media Dec. 1.
Sales taxes are a revenue stream used to fund government operations. The Ohio legislature and the governor determine the tax rates and which goods and services are subject to the tax and which are exempt.
An area’s sales tax has three possible components. The first is the state’s portion, which is currently 5.75 percent in Ohio (a proposal to increase this rate by 0.5 percent has been advanced by Gov. John Kasich). The second is a county sales tax, which can range from 0.25 to 1.5 percent. The third is a transit authority tax used to fund transit authorities and mass transit districts. The transit tax can range from 0.25 to 1.5 percent. For every $100 spent in Ohio, you might be subject to a sales tax of $5.75 to $8.75 depending on the county in which you make your purchase. County sales taxes can be levied by a vote of the electors or imposed by the county commissioners. Transit taxes must be levied by the electors, but do not need the permission of the commissioners to appear on the ballot.
On Dec. 21, the Lucas County Commissioners announced they had started the process to have this tax increase completed and available for a vote at the Jan. 20 commissioners meeting. There were three public hearings held for information and the airing of comments from residents. The hearings began with a presentation stating the case for support of the tax rate increase. Four residents spoke at the first meeting, none at the second and about a dozen at the third. The third public meeting ended less than two hours before the vote on the resolution.
I attended the first and third meetings. Only one speaker was in favor of the tax. Others voiced concerns about what the money would be spent on or gave suggestions on how the new revenue should be used. Suggestions were given on increasing government efficiency and cooperation between other government units. The overall impression I took away was that 80 percent of the speakers were flat-out against the increase and would vote against it if given the chance.
After seeing the PowerPoint presentation at the first meeting, I did some research on the information it provided and found errors. A claim that 48 Ohio counties are already charging the maximum 1.5 percent rate was outdated because a temporary 0.5 percent tax in Erie County expired Sept. 30. A county administrator, not a commissioner, told a speaker that the transit tax rate in Cuyahoga County was 0.5 percent when the tax rate is actually 1 percent. There were also math errors and discrepancies in cited staffing levels for Lucas County, which were reduced between 2008 and 2014.
Examples showing how major county revenue streams have been affected since 2007 did not provide the source of the numbers being used. Relying on the official 2013 “Comprehensive Annual Financial Report for Lucas County, Ohio,” I could not find dollar amounts that correlated to the figures used in the charts. A U.S. Census report or a State of Ohio publication can be used to check and verify the county’s numbers. When no sources are given for the data used, should a questioning person just accept those figures as fact when he has found errors in other information provided by the same people?
The commissioners presented a comparison of Lucas County sales tax rates with those of other urban counties. Cuyahoga (8 percent), Franklin (7.5 percent), Hamilton (6.75 percent) and Montgomery (7.25 percent) counties were selected to show how the new Lucas County tax rate (7.25 percent) would not be out of line with these urban counties.
The misleading part of the comparison is that each of these counties’ tax rates, except for Hamilton County, includes a transit tax.
To compare apples to apples, exclude the state sales tax and any transit taxes. Comparing only the county sales tax for the top Ohio counties by population shows a less favorable comparison of sales tax rates:
- Summit (No. 4) and Stark (No. 7) counties have a 0.50 percent sales tax rate.
- Butler (No. 8) and Lorain (No. 9) counties have a 0.75 percent sales tax rate.
- Hamilton (No. 3), Montgomery (No. 5) and Mahoning (No. 10) have a 1 percent sales tax rate.
- Cuyahoga (No. 1) and Franklin (No. 2) counties have a 1.25 percent sales tax rate.
- Lucas County (No. 6) will have a 1.50 percent sales tax rate.
- In addition Warren (No. 11), Trumbull (No. 12) and Clermont (No. 13) counties have a 1 percent sales tax rate.
- Ohio counties that have a transit tax are:
- Cuyahoga: 1 percent
- Franklin: 0.5 percent (0.25 percent permanent and 0.25 percent temporary)
- Montgomery and Summit: 0.50 percent
- Lake, Mahoning, Portage and Stark: 0.25 percent
Will TARTA seek a levy and try to make Lucas County the ninth Ohio county with a transit tax?
Those residents who attended the public hearings and saw the commissioners’ presentation were given three minutes to respond. Without prior knowledge of what the commissioners had prepared and with little time to form a response, the public was not given an adequate opportunity to form a reasoned rebuttal. If a few evenings with a laptop doing Google searches, taking notes and printing off some articles during TV commercials gave me the information I have accumulated, there is likely much more that a focused group with proper time to prepare could accomplish in rebutting the commissioners’ presentation.
Did the commissioners make a case to raise the sales tax rate? They must have, because they took less than two hours after the final public hearing ended to unanimously pass the rate increase.
This was the only course available to them because they were up against the clock, and any delay could have collapsed the whole operation. If this group had made their presentation to the panel on “Shark Tank” do you think the entrepreneurs would invest in or pass on Lucas County?
The commissioners did show that, when properly motivated, they could improve government efficiency. It took less than 30 days to impose a permanent sales tax increase that will go into effect at the earliest possible date while following all rules and regulations and avoiding opposition or negative publicity that could have doomed their efforts.
What were some other options available to the commissioners? They could have:
- Submitted the tax to a vote by county residents prior to enactment.
- Enacted the tax followed by a referendum at the next general election.
- Made the tax increase temporary for one to three years.
- Dedicated the monies raised by the tax increase to certain operations or functions instead of just dumping it into general operations.
- Capped the amount of new revenue to a specific dollar amount ($2.5 million per quarter and $10 million for one year) which could be used immediately. Additional revenue could be reserved for a specific time (one year) before being used and transferred only at a predetermined rate (25 percent of the surplus balance per quarter) for predetermined purposes.
- None of this was done. The commissioners need to be questioned and made to explain specifically why they disregarded each of the above options. Local print, radio, television and other media must pursue answers on this issue with the same zeal they use to report toxic algae blooms, speed traps or the shooting of a dog by a small-town police officer.
Gary Kiss lives in Toledo. He can be reached at email@example.com.