Fulton County half-cent hike in sales tax mulled

8/19/2009

WAUSEON - The way Leon Shulters sees it, runaway public-sector pay and benefits are a big reason the United States economy has reached its current perilous position, and it's time to reel that back in a bit.

"Our government payroll is breaking us. We need to cut from the top down," the Metamora resident said during a Fulton County Commissioners' hearing last week concerning a possible half-cent increase in the county sales tax.

While "working people's compensation" has stagnated for 20 years, he said, public-sector salaries have become "outrageous," and "that's the reason we're going broke every day."

But the commissioners said their pay hasn't increased in several years, and the crisis that is mounting in the county's budget is a result of falling revenue, not rising costs for personnel, or anything else.

"Expenses have not gone through the roof. Revenues have gone through the floor," commissioner Paul Barnaby said at the conclusion of a budget presentation he and his colleagues gave to explain why they think the county needs the $1.45 million in additional annual revenue that a sales-tax increase is expected to bring.

Sales and use tax proceeds, which traditionally have provided 38 percent of the county's general-fund revenue, are expected to be down nearly 10 percent this year, to $3.8 million from $4.2 million last year.

Fee revenue and "local government funds" distributed by the state are down as well, and while property-tax revenue actually rose this year, it's expected to retreat in 2010.

The decline in county income from investments it makes with its fund reserves is steepest of all: from about $1.3 million in 2007 to just $550,000 estimated for next year.

The commissioners' presentation noted that the county's general-fund budget - the largest of 227 county accounts, and the one that covers most routine operations - has been cut from $11.3 million last year to $10.6 million this year, and is likely to be trimmed $200,000 more next year. Full-time staff paid from the general-fund account, they said, have been reduced from 104 to 94 in the past three years, cutting about $500,000 in wages and benefits.

Raising the sales tax, the commissioners said, would be part of a package of budget measures that would also constrain spending in any of several ways. Options include cutting county departments' hours, a three-year wage freeze, up to 80 hours of unpaid furlough for county employees, and early-retirement incentives.

The commissioners also are considering placing a three-year sunset clause on a sales-tax increase, so that the measure would have to be revisited to make a determination about continuing need for the extra revenue.

James Crawford, of the Dover Township hamlet of Tedrow, said such a tax hike inevitably becomes permanent, because once new revenue comes in, public officials "create some more problems to pay for.

"At the end, you can't get rid of the tax. When are you just going to leave the people to learn to take care of themselves?" he said, arguing that government should restrict itself to obvious public-sector responsibilities like road maintenance and law enforcement.

"The plan is to make up for lost revenues," commissioners' President Joseph Short responded. "We're not looking to add departments. We're looking to continue to operate at the same levels we have before."

And Commissioner Dean Genter noted that the state Lgislature has recently added to service fees collected at the county level, but taken the added revenue to Columbus while cutting state support for services that it requires the counties to provide.

Meanwhile, Al Kreuz, a county commissioner for 16 years ending in 1998, said he considered it to have been an "awesome achievement" that Fulton County had avoided increasing its sales tax since 1987, when the tax doubled from a half-cent to a penny.

The increase now, he said, "is very much justified," and the sales tax, which exempts necessities like food, utilities, and fuel, "is a very fair tax, too."

Commissioners said last week they do not expect to act immediately on raising the sales tax after their second hearing on the matter, scheduled for tomorrow at 9 a.m. in the commissioners' chambers. But for collections to start during the fourth quarter of this year, they'll have to decide by Aug. 31, because state law provides a 30-day period for citizens to petition such an increase to a referendum vote if the county commissioners enact the increase on their own.