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Sales tax rates vary widely in NE Ohio
YOUNGSTOWN
Sales-tax rates wander all over the map in Northeast Ohio.
The reality is illustrated on an Ohio map showing tax rates, county by county, which Mahoning County commissioners handed out when they first proposed a 0.25-percent increase in the county’s sales tax.
Mahoning, Portage, Lake and Ashland counties have a 7 percent sales tax.
Columbiana County has 7.25 percent, the level Mahoning County would have if the increase is adopted here.
Trumbull, Ashtabula, Geauga, Summit and Medina counties have 6.75 percent.
Stark, Wayne and Lorain counties have the lowest sales tax in the state at 6.5 percent.
Cuyahoga County has the highest sales tax in the state at 8 percent, with 1 percent of that going for mass transit.
Mahoning County commissioners seek to renew one of two 0.50-percent sales taxes continuously and add a new 0.25 percent five-year tax in a proposal they plan to put before the voters on the May 6 ballot.
The other 0.50-percent sales tax in Mahoning County is already continuous, with no stated expiration date.
Mahoning County also has a 0.25- percent five-year sales tax that funds the Western Reserve Transit Authority.
In arguing for the new tax, which would raise about $7.5 million annually, the commissioners cited $10.5 million in lost revenue since 2008, including a $3.2 million loss in investment income, a $2.9 million decline in state funding and a $4.4 million loss in income from housing federal prisoners in the county jail.
The commissioners recently adopted a $50,241,014 general fund budget for 2014, which board chairwoman Carol Rimedio-Righetti described as “very tight.”
The general fund supports the courts, jail, prosecutor’s office and the central administration of county government.
In the county’s 2013 general fund budget, $39,565,247 is allotted for wages and benefits combined; and that amounts to about 72 percent of the $55,008,066 general fund budget. That budget includes about $2.5 million in carry-over from 2012 into 2013.
The commissioners have set public hearings on the sales tax for 6:30 p.m. Jan. 6 at the Covelli Centre, 229 E. Front St., and 10:30 a.m. Jan. 13 in the commissioners’ hearing room in the county courthouse basement.
The sales tax rose 0.25 percent in all Ohio counties on Sept. 1, when the state raised its portion of the sales tax from 5.5 to 5.75 percent.
“Unfortunately, it didn’t include the counties in the sharing of that,” observed Craig Snodgrass, Lorain County auditor.
The increase in the state’s portion of the sales tax was coupled with a reduction in state income-tax withholdings.
stark county
“We’re surviving on a half-percent,” said Stark County Auditor Alan Harold.
That tax, which has generated $26.1 million this year, is dedicated to the criminal justice system, including the sheriff’s office, which operates the county jail, the courts and their clerk, and the prosecutor’s office and indigent defense counsel.
The sales-tax money there goes into a justice fund, which is separate from the county’s general fund. The county’s general fund budget is $34.9 million for 2013.
The 0.50-percent tax for the justice system is an eight-year tax enacted by the voters in November 2011, which was first collected in April 2012, and which delivered its first revenue to the county government in July 2012.
Previously, a 0.25 percent tax expired, and another 0.25 was imposed by the county commissioners and repealed by the voters.
As a result, many county workers were laid off because the county received no sales tax revenue between April 2011 and July 2012, Harold said.
Eleven people were laid off in the auditor’s office; and only two or three of those positions have since been refilled, Harold said.
Stark County officials are “very frugal,” Harold said. “There is a genuine cooperative spirit among the elected officials to be good stewards of all the money we receive.”
Stark County’s half-percent sales tax produces substantial revenue because many people from surrounding rural counties, such as Wayne, Holmes and Tuscarawas counties, shop in Stark County’s retail centers, he said.
The Canton Regional Chamber of Commerce estimates 25 to 30 percent of Stark County’s sales tax is paid by residents of other counties while they shop in Stark County.
In Mahoning County, nonresidents pay 40 percent of the sales tax collected, and 65 percent of Mahoning County’s sales tax comes from Boardman, where retail shopping is concentrated, according to Mahoning Commissioner David Ditzler.
Much of Stark County’s retail activity occurs in and around the Belden Village Mall in Jackson Township outside of Canton, Harold said.
Canton is the county seat, and Alliance and Massillon are other cities within Stark County.
In addition to the 0.50-percent sales tax dedicated to the county’s justice system, Stark County has a 0.25-percent sales tax for mass transit, which was renewed for five years in May 2011.
wayne county
Wayne County has a single 0.75-percent continuous sales tax, which generated $9.3 million in 2012.
All of that money goes into the county’s general fund, which totals about $24 million — slightly less than half that of Mahoning County.
“Our [county] commissioners have sent messages to all of us, loud and clear, that they would not increase taxes,” said Jarra L. Underwood, county auditor.
The last local sales-tax increase there was a 0.25 percent increase that took effect in 1994, Underwood said.
“We are a very conservative government — fiscally conservative,” Underwood said. County departments have taken 25 to 30 percent budget cuts in the last five years, she said.
In 2008, Wayne County government, whose county seat is Wooster, had 1,144 employees. Today it has 921.
“If someone retires or leaves an office, we’ve, in a lot of instances, not replaced those employees,” Underwood said.
With no shopping mall and just three small cities, Wooster, Orrville and Rittman, Wayne County has had a slight increase in sales-tax revenue every month for the past 24 months, Underwood said.
Lorain County
Lorain County has two continuous county sales taxes. One is a 0.50-percent tax that is expected to raise $17.1 million to $17.2 million for the general fund this year, and the other is a 0.25- percent tax devoted to the sheriff’s office and raising $8.5 million to $8.6 million.
The county’s annual general fund budget is between $52 million and $53 million.
In November, Lorain County voters rejected a proposal for a new 0.50- percent sales tax, which county commissioners said was needed to meet increased costs for the justice system, including the county jail.
The rejected proposal also would have been coupled with a 1.4-mill reduction in inside (unvoted) real estate tax millage.
Lorain County, whose county seat is Elyria, has among Ohio’s lowest real estate tax millages, Snodgrass observed.
Sales-tax revenues hit a record level last year in Lorain County and will set another record this year, Snodgrass said.
“There’s quite a bit of growth on the eastern edge of the county,” in both the retail and residential sectors, notably in Avon, Avon Lake and North Ridgeville, he noted.
Lorain and Elyria are showing signs of an upward trend in economic development, with existing businesses expanding and new businesses locating there, he observed.
State funding cuts and lower interest on the county’s investments have offset the county’s sales tax revenue gains, Snodgrass said.
“Departments have kept their spending levels either the same or reduced them,” Snodgrass said.
The last major round of layoffs of county workers was in 2009 — the year after the recession began; and many county departments have kept staffing near 2009 levels, selectively adding a few employees as needed, he said.
“Keeping spending down has gotten us through this lack of revenues,” Snodgrass said.
trumbull county
“Right now, everybody is tight,” Debbie Santangelo, senior accountant in the Trumbull County auditor’s office, said of that county’s departmental budgets.
Trumbull has two continuous county sales taxes.
One of those is a 0.75 percent tax for general operations; and the other is an 0.25 percent tax for the justice system, including the courts, the jail and the prosecutor’s office.
Together, these county sales taxes generate about $22 million a year for the county’s $43 million annual general fund budget.
“Compared to last year’s it’s only gone up 1.6 percent,” Santangelo said of her county’s sales tax revenue. “People aren’t spending.”
Trumbull Commissioner Frank Fuda said he and other commissioners have never discussed raising the sales tax during his seven years in office.
“We’ve been doing pretty well with what we have. We’ve had cooperation by all of our elected officials and our unions,” he said.
“Our unions have taken wage freezes for a long period of time.”
In recent years, county officials have concentrated on infrastructure improvements, including $60 million in sanitary sewer projects, Fuda said.
During the recession that began in 2008, the county benefitted from lower than normal bids from contractors, who wanted to secure business and keep their workers employed, he noted.
Improved infrastructure attracts businesses and jobs; and when people are working, they buy more and stabilize sales-tax revenues, Fuda said.
MAHONING DEBATE
Rimedio-Righetti said she envisions the proposed 0.25-percent increase in Mahoning County’s sales tax as a measure that will be for general operations, not as a tax dedicated solely for the justice system such as sales taxes in Trumbull, Stark and Lorain counties.
“It will be for all Mahoning County departments and services,” supported by the general fund, she said.
Earmarking the proposed new tax for the justice system here would be “a deception to the public,” said Audrey Tillis, Mahoning County budget director.
“This is what the general fund, as a whole, needs,” Tillis said of the $7.5 million in new income the new tax would generate annually.
Commissioner David Ditzler, however, said he would support designating the proposed additional 0.25 percent for the county’s justice system. “If you can’t provide a safe environment for the residents of Mahoning County, then you can’t entice new business, new opportunities and new jobs and maintain our population,” he said.
“I would guarantee that every additional dime the quarter percent generates would go to the justice system for Mahoning County,” Ditzler said.
The justice system, including the sheriff’s office, courts, and prosecutor’s office, is Mahoning County’s largest group of users of general fund revenue.
COLUMBIANA COUNTY
With its county seat in Lisbon, Columbiana County is heavily dependent on sales tax revenue, relying on it for $13.5 million, which is more than 74 percent of this year’s $18.2 million county general fund budget.
A 1 percent, five-year county sales tax delivers $9 million annually, and a 0.50 percent continuous sales tax brings in $4.5 million a year.
Nancy Milliken, county auditor, said her county’s 7.25 percent total sales tax rate is necessary to meet escalating expenses.
“Everything goes up in price,” she said, citing employee retirement and Workers’ Compensation costs.
Milliken said sales tax revenues have generally risen over the past five years, with 2012 and 2013 sales tax revenue increasing compared to the preceding years.
“Our sales tax has been inching up” in revenue production, said Commissioner Jim Hoppel, attributing its growth to increased purchasing due to increased employment and drilling lease income from the oil and gas industry.
However, he noted that Columbiana County has no enclosed shopping malls and that the Walmarts in Calcutta and Salem are the county’s only large-scale retailers.
At a total rate of 1.5 percent, Columbiana County’s sales tax is at the highest percentage permitted by state law, exclusive of a mass transit sales tax, which Columbiana County does not have, said Hoppel, a commissioner for 17 years.
As a largely rural county without major retail shopping areas, Columbiana County would not be able to deliver sufficient revenue to county government at a lower sales tax rate, the commissioner said.
Hoppel said Columbiana County is in the bottom five of Ohio’s 88 counties in per-capita general fund spending, which he said indicates county officials are good stewards of tax dollars.
Although Hoppel said he believes the full 1.5 percent for the county is necessary, he said he cast a dissenting vote when the commissioners imposed the 0.50-percent tax about seven years ago after the voters defeated it.
“I believe the citizens ought to have the choice” concerning the level of sales tax and county government services they want, he concluded.