|
|
|||||||||||||||||||
|
||||||||||||||||||||
|
Greater Ohio study shows county sales tax disparities The following was released on August 18, 2004 by the Greater Ohio campaign. For more information, call 614-258-1713. A new study of county sales tax collections in Ohio shows that more than two-thirds of Ohio counties fail to break even on retail dollars spent within their own county borders, according to an analysis by the Greater Ohio campaign. The analysis points to the need for reforms of Ohio's tax structure and land-use policies that lead to a mismatch in public service needs and the tax base to support those needs, according to Gene Krebs, Greater Ohio state director. "The impact of lost retail revenue on local governments is even greater when you factor in the other taxes that come from retail businesses—namely the property and inventory taxes from retail businesses that schools rely on and the income tax from retail employees that go to municipalities," Krebs explained. "County sales taxes help counties pay for about one-third of state-mandated services like sheriff's departments and courts," he added. "The counties that lose retail sales are usually the ones with limited school funds. It was no accident that the DeRolph school funding case was filed in Perry County, which loses half its retail activity to other areas." The Greater Ohio campaign works to support—through research, public education and grassroots advocacy—public policy in Ohio to grow the state's economy and improve Ohio's quality of life through intelligent land use. "When Ohio's tax structure was established in the first half of the 20th century, people typically lived, worked and shopped within a 5-mile radius," Krebs said. "Today, almost no one does, but our taxing structure is still predicated on this outdated assumption. I think this analysis helps illustrate that point." The analysis examines two decades of sales tax records for all 88 Ohio counties, finding that counties most likely to have high service obligations are rarely the counties with the strong retail base needed to pay for them. The analysis converts raw tax data into sales tax ratios that adjust for inflation, as well as differences in county sales tax rates, population, and per capita incomes. The use of standardized ratios allows for comparisons between different counties over time. A sales tax ratio of 1.00 describes a county that had as many shoppers entering the jurisdiction as leaving it. Many counties have ratios that are either significantly higher or significantly lower than 1.00. Current taxation and land-use policies tend to encourage destructive inter-jurisdictional competition for resources, as municipalities and townships fight for big-box stores and regional retail centers, Krebs said. "Imbalances between local revenues and public services may not only be a question of equity, they may hurt Ohio's economic competitiveness. Ohio ranked 49 out of the 50 states in economic momentum last year. Too many of our talented young professionals are fleeing in search of jobs in other states. We need more economic development in Ohio, not just that which is adjacent to interstates. Every family in Ohio has a personal stake in this." The study recommends restoring funding to the state's Local Government Fund and more creative investment tools for Ohio's rural communities and downtown commercial districts. This analysis of sales tax disparities in Ohio was conducted by Greater Ohio intern Tom Wisemiller, a graduate student in Cornell University's City and Regional Planning program. In pursuance of his graduate thesis, Mr. Wisemiller will conduct additional research in the fall of 2004, and with the assistance of Cornell faculty, he plans to develop an economic model for assessing imbalances between county revenues and services in Ohio. |
|
|