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Published: Thursday, 3/31/2005

Taft touts tax reform in Findlay

BY STEVE MURPHY
BLADE STAFF WRITER
Gov. Bob Taft checks out a built-in dishwasher in a display kitchen at the Whirlpool plant in Findlay, where he also talked about his tax reform plan during a roundtable discussion. Gov. Bob Taft checks out a built-in dishwasher in a display kitchen at the Whirlpool plant in Findlay, where he also talked about his tax reform plan during a roundtable discussion.
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FINDLAY - During a visit yesterday to one of Hancock County's largest employers, Gov. Bob Taft said the Whirlpool Corp. is the type of business that could thrive under his plan to revamp Ohio's tax code.

Addressing area businessmen and local government officials at Whirlpool's dishwasher plant north of Findlay, Mr. Taft said phasing out the corporate franchise and tangible personal property taxes would help Ohio retain and attract manufacturers and small businesses.

Those taxes work against Ohio when state officials speak with existing and potential employers, the governor said.

"There is no magic bullet out there but this will clearly help our ability to compete and retain what we have," he said.

The governor also has proposed cutting personal income tax rates for individuals and businesses by 21 percent over five years and letting the state sales tax rate drop from 6 percent to 5.5 percent July 1, instead of falling to 5 percent.

To offset most of the revenue loss from those tax cuts, Mr. Taft wants to enact a 0.26 percent business tax on gross receipts over $1 million.

The governor said the gross receipts tax would fairer and easier to administer.

Some manufacturers such as Whirlpool, which employs about 2,200 in Hancock County, are backing Mr. Taft's plans.

However, some large retailers have objected to the proposal, which could raise their taxes.

The Ohio Chamber of Commerce has voiced support for the proposed tax cuts but opposes the gross receipts tax. Mr. Taft noted that even with the gross receipts tax, the state would take in $800 million less over the next two years, and he said the business group had failed to offer a true alternative.

"The chamber's plan is not a plan at all," he said. "It's a political stance."

Riad Yammine, chairman of the board for the Findlay-Hancock County Chamber of Commerce, said he supports the governor's plan, through the group has taken no position. "I think overall the plan goes a long way to correct problems vis-a-vis our competitiveness with our neighboring states," Mr. Yammine said afterward.

Municipal and school officials have expressed concern about how the end of personal property taxes would affect their budgets. State Rep. Mike Gilb (R., Findlay) said tax legislation pending in the Ohio House calls for the state to replace the total lost revenue to local entities for five years, with those payments to be phased out over the following 13 years.

Findlay Mayor Tony Iriti said the idea of reducing the tax burden on manufacturers makes economic sense, but he's worried about the effect on his city's budget. He estimated that the governor's plan would cost Findlay about $750,000 a year.

Tim Myers, superintendent of the Van Buren Local Schools, which includes the Whirlpool plant, said the plan would "devastate" his district, which relies on personal property taxes for 29 percent of its budget.

"It's good for business, but it's bad for schools," Mr. Myers said in a phone interview. He said his district gets about $2 million a year in personal property tax revenue and stands to lose almost all of it under the plan.

Contact Steve Murphy at:

smurphy@theblade.com

or 419-724-6078.


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