MAHONING VALLEY Officials await effects of estate tax revisions

Mahoning County dished out more in estate taxes last year than Trumbull and Columbiana combined.
By TIM YOVICH
and BOB JACKSON
VINDICATOR STAFF WRITERS
YOUNGSTOWN -- Some Mahoning Valley communities anticipate a decline in estate tax receipts with a change in state law.
For others, the change that went into effect Jan. 1 won't be a bother, and some just don't know what to expect.
Since 1968, Ohio has had an estate tax that taxes the value of a person's estate before it is passed on to heirs.
Until Jan. 1, estates of $25,000 or less weren't required to pay the estate tax. But the law was amended at the beginning of this year increasing the exemption to $200,000. Next year, the exemption will increase to $338,000.
At the same time, the percentage of the tax staying in the counties rather than going to the state has increased from 64 percent to 70 percent. Next year, the counties' share will increase to 80 percent.
Mahoning County distributed more than $7.5 million in estate taxes to cities, villages and townships in the past year. Trumbull County distributed nearly $3 million and Columbiana County distributed nearly $1.5 million during the same period.
Liberty, Howland: Jack Simon, Liberty Township trustee, said he can see a decrease in the nearly $450,000 the township received in the year ending in August. The reason, he said, is that old-money families are moving out of the township, along with its younger people.
Some, such as Trumbull County Auditor David Hines, question whether there should even be an estate tax because people accumulate it and can't leave all of it to their heirs. He characterizes it as taxing the dead.
Others such as John Emanuel, Howland Township administrator, view it as a valuable source of income.
Howland received $432,983 in the past year. Howland uses the money for long-term capital investments such as construction of its new government building and to buy land to expand the township cemetery.
Emanuel said the Ohio Township Association, which represents trustees and clerks at the state level, lobbied against the change.
Changes weren't discussed until eight to 10 years ago because people were building up more wealth with the brisk economy, he pointed out.
Warren: In some communities -- such as Warren, with its budget problems -- revenue from the estate tax has been channeled to the general fund to pay for such things as salaries.
In the past year, Warren has collected $666,250 in estate tax.
Warren Auditor David Griffing said passage of a 0.5-percent increase in the city income tax might allow for some capital improvements.
Griffing said he believes the state is attempting to eliminate the estate tax. If it does, Griffing added, the state must replace the lost revenue.
Griffing said Warren hasn't seen a decline in revenue. He suspects older people might move into the city to be closer to services since the county doesn't have a mass transit system.
At the same time, he explained, the more affluent may move out of the city.
Boardman: For years, Boardman Township has consistently been among the largest recipients of estate tax revenue in Mahoning County, Trustee John Cox said. Figures from the auditor show the township took in some $2 million last year.
Like Howland Township, the revenue has been used for construction of a new government center and police department on Market Street and a new road department garage.
Cox said he favors the higher tax threshold because it will allow families to "keep and enjoy more of their money without the government stepping in and taking it."
And though Cox said he doesn't foresee a major drop in that revenue, the township doesn't count on it to pay for personnel costs because of its unpredictable nature.
"If you counted on that tax for personnel, you'd be in real trouble," he said.
Youngstown: Barbara Burtner, Youngstown city finance director, agreed.
"It's always a crapshoot as far as what I put in the budget for revenue," she said, noting that payments delivered from the county auditor's office "fluctuate wildly."
Youngstown's settlements, like Boardman's, are generally high. Burtner chalked it up to "old money" residents living in places like the Park Vista retirement center. The money is used for general operating expenses, not for personnel.
Columbiana township: The unpredictability of estate taxes is most obvious in Washington Township, located in southern Columbiana County. After receiving about $400 a year for the past 25 years, the township of 950 people recently got a check for more than $250,000 in estate taxes.
"That came as a huge shock," said Trustee Jim Brammer. "I've been a trustee around here for 26 years and we've never gotten nearly that much."