Panel stresses need for renewal

A sales tax that expires next year brings in $14 million to the general fund.
By PETER H. MILLIKEN
VINDICATOR STAFF WRITER
YOUNGSTOWN -- There's no immediate cause for alarm in Mahoning County's revenue projections, but if a half-percent percent sales tax that expires at the end of 2007 isn't renewed, the county will again be in big financial trouble, the county prosecutor said.
"I don't think Chicken Little ought to be out saying the sky's falling yet," Prosecutor Paul Gains said in a recent county budget commission meeting. The commission consists of Gains, County Auditor Michael Sciortino and Treasurer John Reardon.
If the tax isn't renewed, Gains said: "Chicken Little will be right -- the sky is falling -- because again we'll be back in the same position that we were when it failed two years ago. Again, it's that up-and-down revenue. We can't operate a jail like that. We can't operate this building," he said, referring to the county courthouse, where the meeting was held in Sciortino's office.
The sales tax will likely be on the ballot for renewal in May or November of next year, Gains said, noting that his office hasn't been consulted concerning a renewal question for this November's ballot.
If the tax isn't renewed, the county would see its last revenue from it in March 2008 because sales tax revenue goes to the state, which takes three months to send the county its share.
The county's other half-percent sales tax expired at the end of 2004, but voters renewed it in May 2005, and collection of it resumed in October 2005.
Each of the sales taxes generates about $14 million a year for the county's general fund.
With $47.7 million in anticipated revenues this year, the general fund pays for these services: the courts, clerk of courts, board of elections, data processing, and the sheriff's, auditor's, treasurer's, recorder's, prosecutor's, coroner's and commissioner's offices.
Initial forecast
Based on year-to-date collections, Carol Kaufman, chief deputy county auditor, predicted this year's sales tax revenue will be $27.3 million, which is $1.2 million below her initial forecast.
March sales tax receipts were $2.8 million, which was $100,000 less than March 2005 receipts, she said. The March figures reflect the all-important Christmas sales in December, noting the three-month interval between sales being rung up at cash registers and the time the county receives its tax revenue.
Sciortino said the decline in December sales could have resulted from reduced discretionary spending by consumers because of the uncertain status of Delphi Corp. and General Motors and higher heating bills and gasoline prices.
Kaufman initially predicted $2.2 million in income this year from the county's investments, but she has revised that figure to $3.1 million because of rising interest rates.
County Administrator George Tablack, a former county auditor, presented a more optimistic view of revenues, however.
"Through May, there's nothing, including the initial negative variances in sales tax, that alarms us sufficiently to where we're concerned we may come in below" projections, he said.
When there's a new or reinstated sales tax, compliance by retailers in making collections is incomplete, he said, noting that sales tax collections have improved every month since January of this year.
Spending potential
Although uncertainty about GM and Delphi could cause some people to curtail discretionary spending, a rise in interest income could cause retirees to spend more from their savings, Tablack observed.
"Our job in this office is to project where we think revenues are going to be so that the commissioners can then spend wisely," Sciortino said. Calling himself "fiscally conservative," Sciortino urged commissioners to be prudent in their spending.
"Let's keep sight of where we want to be next year and where we want to be five years from now," he added.