Butler commissioners oppose governor’s sales tax solution

Butler and a host of other counties are mounting a fight over Gov. John Kasich’s proposed one-time payment to make up for millions in lost Medicaid sales tax monies.

The county stands to lose more in $3 million in sales tax revenue since the federal government outlawed the tax collection in the state. The governor’s proposal would provide a one-time only “transitional” payment of $2.1 million, and Butler County commissioners said they find that unacceptable.

MORE: County to lose $3 million in sales tax money

“We can expect that to be a $3 million loss annually, which would burden the general fund and would not allow us to have our structurally balanced budget,” Commissioner Cindy Carpenter said. “That amount shifted from state structured revenue to the county is not something that is sustainable.”

Carpenter proposed the county join about a dozen other counties in a joint resolution objecting to Kasich’s plan. Commissioner T.C. Rogers said he agreed with his colleague, but said since county officials are meeting with the County Commissioners Association of Ohio later this week, they should probably wait to see if a greater groundswell of opposition is afoot.

“I’d like to make sure our resolution is going to be the most effective if we have CCAO pushing this, because it represents all county commissioners across the state,” he said.

Carpenter agreed to wait until that meeting to proceed.

RELATED: Governor offers one-time only payment solution

The state had promised to try and come up with a solution to the sales tax loss but John Charlton, communications director for the Office of Budget and Management, said the state never promised a 100 percent or permanent solution and they didn’t just spring it on counties with no warning.

“We didn’t keep this a secret, we were told in 2014 that this tax was going away and we’ve been sharing that information widely for several years,” Charlton said. “So I believe they’ve had plenty of time to plan to adjust for a decrease and matter of fact probably should have been planning for a total loss of that revenue.”

Not only do the commissioners disagree with the governor’s one-time-only “fix” but they also took issue with the distribution of the payments across the state. Office of Budget and Management Director Tim Keen said previously they distributed the funds based on a county’s need and reliance on that revenue stream. Of the 88 counties in the state eight, including neighboring Warren County, will get nothing.

Butler County officials have worked hard to pull the county off the fiscal cliff it once found itself edging over and Rogers said they are being penalized for their current healthy financial condition.

“This budget has a component in it that if you are a county that proves not to need it as much as other counties then you don’t get as much of your percentage,” Rogers said. “So you are penalized for doing well.

County Administrator Charlie Young described the governor’s distribution of funds as skewed in favor of jurisdictions that have not practiced restraint where finances are concerned.

“It appears to be a very perverse viewpoint from the governor’s office that the more fiscally sound the county or the local government operates the less helpful the state appears to be,” he said. “The formula they create looks at your ability to raise taxes and if you’ve already raised them as far as you can, you get more consideration than if you have been frugal and financially sound. It is a continuing pattern that we’re seeing.”

Commissioner Don Dixon said the governor’s philosophy on local funding is “backwards” because it appears to discourage sound financial management.

“What has to happen is the philosophy of the governor has to change…,” Dixon said. “They look at us as you have the ability to raise taxes and you have the ability to tax your residents, you need to use it and we’re going to take more money from you and give it to the ones that already maxed out their taxes. That’s just backwards.”

The governor’s proposal is not the final word on the issue and the commissioners are hoping to get help from their local legislators who also have a say in state spending. State Rep. Wes Retherford, a Hamilton Republican, said the proposed distribution formula is “fundamentally wrong” and he expects the state budget will look much different after the legislature is finished with it.

“A lot of the stuff the governor is proposing I haven’t heard a whole lot of support for it, at least from my caucus members” Retherford said. “There’s going to be a lot of changes I believe in the budget.”

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