Montgomery County commissioners are considering a retail sales tax increase that could add $19.1 million a year to the budget, but first they need to have public hearings.
The first is in a rare 6 p.m. Tuesday hearing on the 10th floor of the County Administration Building, where commissioners will take comments on the proposed 0.25-percent increase. The event was scheduled later to increase public participation.
“We are looking forward to hearing from people,” said Montgomery County Commission President Debbie Lieberman. “We don’t want to do this. Believe me, it’s not easy.”
With a $9 million budget shortfall looming for Montgomery County in 2019 — and more projected in years beyond — Joe Tuss, the county administrator, recommended the tax increase to commissioners in February as a Five-Year Financial Advisory Committee bore into the county’s general fund budget in a series of meetings.
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The new revenue would allow the county to maintain efficient government operations while continuing to strategically invest in a host of discretionary programs would otherwise be on the chopping block, including arts and youth jobs programs as well as the popular Economic Development/Government Equity (ED/GE) grants that help attract and expand businesses, said Tuss.
“I believe that the citizens of Montgomery County want to continue the positive momentum in job creation, workforce training and opportunities for youth that we have been able to achieve, recognize the need for critical investments and support for our criminal justice system, and that we must act at the local level to build the community that we want to live in,” Tuss said.
The county rolled out the plan publicly at the end of April during an informational session at the downtown Dayton Metro Library.
Huber Heights resident Steve Boyer said then that he was concerned a sales tax increase would send residents 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,” Boyer said. “We’re going to right up there in the 88 counties with the highest sales tax.”
Purchasers in Montgomery County — and those in 52 other Ohio counties — now pay a total retail sales tax rate of 7.25 percent. The state currently gets 5.75 percent of that while 0.5 percent of the tax collected in Montgomery County goes to the Greater Dayton Regional Transit Authority.
At 8 percent, the overall retail sales tax rate in Cuyahoga County, which includes a 1 percent transit tax, is the highest in the state. A portion of Licking County pays 7.75 percent. If a 0.25 percent increase is approved, Montgomery County would join Franklin County and portions of Delaware and Union counties with the third-highest sales tax in the state.
Larry Klaben, CEO of Morris Furniture Co. that has stores in at least five other counties, said a 0.25 percent sales tax increase is unlikely to send shoppers across county lines.
“We see the differential in sales tax between counties, and we’ve never seen that that has changed the way people will buy in their home counties,” he said in April. “This is a great investment in our future, and they are doing this with a balanced approach.”
Area counties and their sales tax rates include: Butler, 6.5 percent; Clark, 7.25 percent; Darke, 7.25 percent; Greene, 6.75 percent; Miami, 7 percent; and Warren, 7 percent. Unlike Montgomery County, the rates for those neighboring counties do not include a 0.5 percent public transit tax.
It’s unclear how commissioners will ultimately side when they vote following the second hearing July 26.
“We haven’t taken a straw poll yet, so I don’t know what’s going to happen,” Lieberman said.
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. If approved, purchases could be subject to the new rate as soon as Oct. 1.
Tuss has also given recent presentations on the state of the county budget to the boards of the Dayton Area Chamber of Commerce and the Dayton Development Coalition. The county’s 2018 general fund budget is $154.7 million.