Purchases in Warren County will include a one-quarter percent additional sales tax in January — barring a referendum — under a plan to help pay for a new $50 million jail.
On Tuesday, the Warren County Board of Commissioners voted unanimously to move toward raising the sales tax from 6.75 percent to 7 percent.
The tax is expected to raise $10 million a year, cutting deeply into the costs of financing the project.
“Maybe we can do it right around $50 (million),” County Commissioner Dave Young said.
If financed up to 30 years through a private lender, the project could cost as much as $86 million. But commissioners are considering self-funding of the debt and devoting $2.5 million a year to pay down the debt in five years or less.
A referendum effort could be mounted, unless the commissioners minimize the burden on taxpayers, said Ray Warrick, a tea party leader in Warren County.
“I would hate to have to undertake a referendum,” Warrick, administrator in Hamilton Twp. and former chairman of the county GOP, said after the meeting.
“I think they have to show some good faith,” Warrick said. “It’s all our money. Let’s make it as small as we can.”
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After months of discussions and a two-hour debate Tuesday, county commissioners voted to hold public hearings on July 11 and July 18 before approving the tax.
Voters would have 30 days to collect about 5,800 signatures to trigger a referendum. Otherwise, the sales tax would be increased for up to five years.
A jail study projected the cost at $56 million, not including costs to borrow money for the project. Plans are to begin construction in 2018 and move into the new facility, to be built behind the current facilities, in 2020.
The jail, which holds 280 inmates, is typically at capacity. The proposed new facility would hold nearly 460.
Officials say they have run out of steps, including the release of non-violent offenders, to conserve available cell space.
After Tuesday’s meeting, Sheriff Larry Sims, who is guiding the jail replacement project, sympathized with the commissioners’ concerns about proposing a tax hike.
“I get that it’s a tough decision to make,” Sims said.
Before joining Young and Commissioner Shannon Jones in moving forward on the sales tax, Commissioner Tom Grossmann questioned why the county couldn’t dip into a $215 million treasury, more than $100 million from which money could be borrowed.
He also proposed the county rolling over the continued debt every five years, although “No one is aware of this happening anywhere in the state,” Warren County Auditor Matt Nolan said.
In part, Young and Jones favored the sales tax, rather than a property tax, because the majority of sales tax is paid by people who live outside the county, rather than local residents.
“We might all think that is great, but people are paying more taxes,” Grossmann said.
Also, the county is considering seeking a property tax levy to fund children’s services.
Grossmann joined the other two commissioners in supporting the sales tax increase after Nolan projected the outcome if the county tried to pay for the project without raising taxes, while also cutting as much as $40 million from the annual budget over five years.
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“By 2021, we would be in fiscal emergency with no carryover balance,” Nolan said.
Also, Nolan warned cutting into the county’s “rainy day funds” would also hurt the county’s AAA bond rating and prompt downgrade of the county’s financial condition by the Ohio Auditor of State.
Nolan, current County Treasurer Jim Aumann and his successor this year, Barney Wright, opposed Grossmann’s suggestions to use as much as $25 million from the county treasury, rather than the sales tax hike, be used to pay for the jail.
“I’m not making that decision,” Wright said.
“Nor would I,” added Aumann, who is leaving office later this year.
The commissioners still need to nail down the total cost for the jail.
A jail consultant projected jail costs at $40 million to $60 million, but county officials anticipate costs of $50 million or less.
On Tuesday, officials suggested a private lender might be able to offer a lower interest rate on tax-exempt bonds to make a better deal than could be offered through the county treasury.
By specifying the tax hike and duration, the county can “guide the conversations” on how much is spent on the jail, Jones said.
Depending on financial conditions, the county might be able to retire the debt in four years, paying off the debt and ending the tax hike a year early, Jones added.
Sales Tax Increase
Tuesday, July 11, 9:30 a.m.;
Tuesday, July 18, 9 a.m.
406 Justice Dr., Lebanon
For information, 513-695-1250
Warren County Jail
By the numbers
280, number of inmates current jail holds.
468, number of inmates new jail might hold.
$7.9 million, the 2017 budget for the jail.