Montgomery County Administrator Joe Tuss recommended the increase as a Five-Year Financial Advisory Committee met in February to examine how to keep the county’s books balanced into the future.
The proposed tax increase would generate $19.1 million and help plug a $9 million general fund budget gap from the loss of managed care sales tax revenue.
“That may sound like a lot of money. In a gross sense it is,” Tuss said last month. “But when you look at the needs we have as a county … this sales tax increase is something that is going to allow us to continue to operate in an efficient and effective responsive fashion, invest in the community, and we won’t be back here five years from now asking for more.”
If the sales tax increase passes, it would go into effect a few months before vehicle registration fees go up $5 beginning Jan. 1, 2019. In February, county commissioners approved the new permissive tax that will raise about $2 million annually for roads and bridges.
MORE: The cost to register a car in Montgomery County is going up
Many at an April public meeting spoke in favor of the sales tax increase to prevent cuts to programs that help fuel economic development efforts, offer arts and job opportunities for youth and fund criminal justice programs the county says saves money by keeping people out of jail.
But others worried a sales tax increase would hit residents in the pocketbook and force them out of the county to shop.
“A sales tax increase combined with rising property values and fuel prices — we all see the price of gasoline right now — are factors that could hurt Miami Valley families,” said Steve Boyer of Huber Heights. “We’re going to be right up there in the 88 counties with the highest sales tax.”
RELATED: Could you pay more sales tax? Meeting draws praise, complaint
The overall retail sales rate in Cuyahoga County, which has a 1 percent transit tax, is the highest in the state at 8 percent; a Montgomery County increase would make it the second-highest county in the state.
The county’s 1 percent retail sales rate puts it currently in the lower quarter of Ohio’s 88 counties, but a 0.50 percent Greater Dayton Regional Transit Authority tax skews the percentage upward. Many counties have higher sales tax, including Clark and Preble at 1.5 percent and Miami and Warren at 1.25 percent, while Greene collects 1 percent and Butler 0.75 percent.
Montgomery County has collected a retail sales tax of 1 percent since 1989. If an increase is approved by county commissioners, the cost per person in Montgomery County is estimated to be about $36 more a year for a total of $182.