COLUMBUS - Most attention on Ohio's proposed $49 billion budget focused on a temporary penny hike in the sales tax, but tucked throughout the 3,000-plus page bill are fee increases affecting everyone from hunters to boxing promoters.
It will cost more to fish, record deeds, dump garbage, inspect migrant labor camps, and get a funeral director's license under the budget expected to be signed by Gov. Bob Taft this week.
“Fees are taxes,” said Sen. Lynn Wachtmann (R., Napoleon), who voted against the two-year budget. “When they target a small population, it has the potential of great economic harm, whether it's a tavern or whatever small business on Main Street.”
Mr. Taft proposed at least $100 million in new and higher fees over the biennium, and lawmakers went along with most of them when they approved a budget last week. The Buckeye Institute, a conservative think-tank, counted at least 40 fee increases in the spending plan.
“The demand for revenue is so high given the shortfalls in income-tax revenue that states are looking to fees to make up for the lost revenue without increasing taxes,” said Joshua Hall, Buckeye Institute director of research. “Things are so bad in Ohio that they felt they had to do both.”
Budget debate focused largely on the $3 billion in additional taxes, including a temporary increase in the state sales tax to 6 percent and the taxing of business 1-800 numbers, dry-cleaning, and satellite TV.
“Taxes are identified by voters as something they're opposed to,” said House Democratic leader Chris Redfern (D., Catawba Island). “The fee increases are so specific, applicable to very specific circumstances, that they're not as easily identified. Ultimately they're the same [as taxes], but politically they're more palatable.”
Unlike broad-based taxes, fees typically target certain businesses or consumers of government services, such as those applying for permits, undergoing inspections, or seeking certification.
The fees generally are supposed to cover the cost of supplying those services, but some are diverted to other uses or placed in the general fund to help balance the budget.
Fees on liquor permits help pay for alcohol treatment programs and to balance the budget. The doubling of the cost of recording a deed or map at the county recorder's office will create a new dedicated funding stream for housing programs, thereby easing pressure on the state budget.
As of July 1, fees will double for numerous liquor permits that currently cost $300 or less. For major bars and restaurants whose permits currently cost more than $300, fees will increase 25 percent.
“With the family-owned business, the money is directly taken out of a down payment on a new cooler or a capital improvement,” said Phil Craig, executive director of the Ohio Licensed Beverage Association. “It's not devastating, but it's enough to harass. It doesn't generate that much money to begin with, but it's a bother.”