You’re not CENSORED here! – Tell me what you think?
Olson suggests sales tax increase — and fast
MANSFIELD – Recently retired Richland County commissioner Ed Olson says the clock is ticking on a need for current commissioners to decide whether to approve a temporary 0.25 percent increase in the county’s sales tax rate, to avert cutting $4 million in budget requests.
Olson sent an email hours after officially leaving elected office, advocating that the county’s bond counsel issue an advisory to commissioners on what the firm would charge to prepare resolutions needed to implement an increase in the sales and use tax.
The email was written “as a taxpayer” and copied to current commissioners Tim Wert, Gary Utt and Marilyn John, along with more than three dozen other county officials.
As of Thursday, commissioners had not discussed the proposal on the record.
Richland County’s current tax rate is 7 percent, the same amount as one other adjacent county, Ashland. One nearby county is lower (Knox, at 6.75 percent), but Crawford, Huron and Morrow counties all are higher, at 7.25 percent.
“I have no comment. I haven’t read it yet,” Wert said Wednesday, referring to Olson’s proposal.
Commissioner Marilyn John, who replaced Olson, said she was aware of the email, but said the 0.25 percent sales tax increase has not been a subject of discussion among current commissioners.
“We are just now entering into budget talks and going over departmental budgets — just started yesterday, as a matter of fact,” she said.
Utt said Thursday he had no comment until he has a chance to look further into Olson’s suggestions.
Olson’s email was sent Jan. 1 at 2:05 a.m. to Allison M. Binkley of Squire Patton Boggs, and copied to commissioners and other county officials.
Heads of departments receiving money from the general fund have made $34 million in requests for 2015, but revenues in that fund have been roughly consistent at about $30 million for the past two years and probably will be for this year as well, Olson argued.
“If 2015 revenues do come in at $30 million, or slightly above that figure, it will be difficult to affect permanent cuts of $4 million in 2015,” he wrote.
The former commissioner said general fund spending by the county stood at $34 million in 2008 — the start of the downturn — and added that elected officials and departments “are not asking for any more money than what they needed seven years ago.”
“In the depths of the recession in 2009, Richland County reduced staffing by 17 percent and has not backfilled more than six positions since then,” Olson wrote.
“There is growing pressure to backfill positions in the new jail, sheriff’s road patrol, the engineer’s tax map office, and to a lesser extent in 911 operations, the commissioners’ office, and possibly the courts and clerk of courts and the board of elections, as well as holding back funding for new voting machines in the board of elections (once clear direction is provided by the State of Ohio) and greater funding for autopsies in the coroner’s budget,” he wrote.
Historically, when Richland commissioners institute a sales tax increase, that is followed by calls for an initiative petition to repeal the tax on the next ballot, Olson said. However, if commissioners institute a temporary tax, “the only ballot issue that can be proposed is a primary election vote to prevent the tax from taking effect.”
An emergency vote to institute a tax requires a unanimous vote of all three commissioners, while a nonemergency sales tax increase requires only two of the three members for approval, Olson noted. “If there are only two votes to support the issue, it will have to be a nonemergency measure, and the clock starts on Jan. 1, in order to have the measure in place for a 60-day delay to allow the tax to start on April 1,” Olson said.
“If April 1, 2015, is missed, the revenue between September and December will help, but will be insufficient,” Olson said.
If commissioners act in January, it’s likely a tax increase would not actually go into effect until April, with collections starting on the first day of the next quarter (July 1).
Any decision made after Jan. 30 would go into effect July 1 (the start of the third quarter), with revenue not collected until September, Olson said.
The former commissioner estimated the county would see about $3.7 million annually from a tax increase if it went into effect over an entire year.
A decision by the end of January would result in about $2.16 million in collections in 2015, but a later decision would mean collecting only about $1.2 million over the last four months of the year, Olson said.
Olson said the tax increase should be by unanimous vote. “It will be difficult to convince a public that is already skeptical of government that a measure makes sense if it cannot even attract three votes on a three-member board,” he wrote.
Richland County Auditor Patrick Dropsey said he could not estimate how much might be collected under different scenarios for the hypothetical situation Olson presented. “Unless and until the county commissioners make that decision, it is futile to try and guess,” because of too many factors that could change collection figures, Dropsey said.