Sales-tax plan has residents seeing red

Local business owners say they could be adversely affected by the governor's tax proposal.
& lt;a href=mailto:skolnick@vindy.com & gt;By DAVID SKOLNICK & lt;/a & gt;
VINDICATOR POLITICS WRITER
YOUNGSTOWN -- Kathy Corcoran won't stop taking her husband's shirts to the dry cleaners, getting her nails and hair done or stop going to the movies if Gov. Bob Taft's proposal to expand the state sales tax to cover those services is enacted into law.
But the Austintown woman said the tax increase would curtail the amount of times she uses those services.
"I wouldn't stop, but a tax increase would definitely impact me," Corcoran said Thursday as she dropped her husband's shirts off at Dale Cleaners in Austintown. "I'd like to see why the state can't cut more. I'm on a budget. If my costs go up, I have to cut. When I overspend, how do I make it up? Who do I go to? It isn't right."
Taft proposed raising $2.3 billion in new taxes to get the state's budget out of the red. Taft announced last week that the state was $720 million in debt, and Democrats estimate the deficit will hit $4 billion during the 2004-05 budget cycle.
Services
Taft wants to collect sales tax on services including dry cleaning, pet grooming, manicures, tanning salons, cable and satellite television, real estate commissions, movies and local telephone service. The 5-percent sales tax on those items has to be approved by the state Legislature. Some legislators have been cool to Taft's proposal.
James Dinh, who operates Todays Nails on Market Street in Youngstown, said a tax increase on manicures is a terrible idea, and could affect his business.
"They aren't going to get much money on it," Dinh said. "Customers are used to not paying taxes, and if you say, 'You've got to pay 5 percent sales tax,' they might say, 'The hell with it' and stop coming."
Dinh said he understands the state's economy is struggling.
"But when the economy is slowing down, you're supposed to cut taxes, not raise them," he said.
Brandy Griffin, who works at Towne and Country Dry Cleaners in Poland, said taxes are too high already.
"They should cut taxes," she said. "They should learn to budget better."
Luxury items
Kathy Hopkins and Jean Honsinger, who own H & amp;H Pet Grooming in Mineral Ridge, said the increased price they would have to charge customers to cover the sales tax could hurt their business.
"We try to keep our prices low, and to have to tack on 5 percent would tick off a few people," Honsinger said. "It's a luxury item, and with a tax, you'd run into people who wonder if they really need it."
Honsinger also said having to collect a sales tax would place a burden on the small business.
"We'd have to spend more time with tax collection and we'd have to set aside the tax money," she said. "The amount would be so minimal for all the work we'd have to do."
John Burgan, who owns Burgan Real Estate Ltd. in Boardman, understands the predicament Taft is in to keep the state out of deficit. As a member of the governor's small business advisory committee, Burgan met in December with Taft to discuss the struggling state economy.
"He has to do something," Burgan said. "He's loading up as many things as he can to be taxed and hoping some of them pass. You can't make up the difference just by taxing liquor and cigarettes."
Burgan said the strong real estate and homeowners lobbying efforts will probably mean the tax on real estate commissions will not be enacted into law.
But if it is, Burgan said it will be felt by numerous home buyers, particularly those buying smaller houses.
& lt;a href=mailto:skolnick@vindy.com & gt;skolnick@vindy.com & lt;/a & gt;