Sales tax in Fulton County to rise to 1.5 percent

9/18/2009

WAUSEON - Unanimous in their stated reluctance as well as their votes, Fulton County commissioners Thursday approved a half-percentage-point increase in the county sales tax, bringing it to the 1.5 percent state maximum.

Echoing remarks they made during three recent public hearings about the proposal, the commissioners prefaced their decision by citing declining revenue and a widening budget deficit.

"Because of the extremely difficult economic climate, we're forced to make decisions we otherwise would not make," commission President Joseph Short said. He conceded that the increase "will affect every family in Fulton County."

Approved as an emergency measure, the sales-tax increase will take effect Jan. 4 unless a referendum vote is petitioned within 30 days, County Administrator Vond Hall said. Such a petition must contain valid signatures equal to 10 percent of those who voted in the county's last general election.

As approved, the increase would be effective for three years, after which the commissioners could allow it to expire or extend it or make it permanent.

The commissioners also approved a plan to furlough employees in county general-fund departments for two days between now and year's end. Officially, those days will be Nov. 27 - the day after Thanksgiving - and Christmas Eve, but the wage impact will be spread out over all pay periods remaining this year as a 3.84 percent decrease.

The commissioners' own pay will be included in the reduction, and they encouraged county officials in charge of other departments to follow their lead.

Under state law passed this year, the commissioners have authority to impose furloughs of up to 80 hours on their employees between now and June 30 and again during the subsequent 12 months.

Mr. Short said furlough time beyond the 16 hours that commissioners approved yesterday, along with other cost-cutting measures such as reduced office hours and a three-year pay freeze, will be the subjects of future discussions.

The sales-tax increase, which when combined with the state's share would boost the sales tax in Fulton County to 7 percent from 6.5 percent, is expected to bring the county about $1.4 million in additional revenue.

That would more than offset an $800,000 projected budget deficit for next year, but commissioners said they also need to start replenishing reserves that have been depleted in recent years by declining revenue.

"Expenses have been flat to down since 2001, but you can only do that for so long" and still maintain services "at the level Fulton County residents, I think, want to have," Commissioner Dean Genter said.

Including September receipts, Fulton County has received $2.85 million in sales-tax revenue so far this year, down 8.9 percent from the same period a year ago.

Service fees and investment income also have declined, and officials expect property taxes to drop next year.

At Don's Automotive Group on North Shoop Avenue in Wauseon, general sales manager Ray Garcia said of a sales-tax increase, "People will rush in at the end of December to beat the tax increase, but after that, the tax will be what it is.

"If the county needs it, I think they should [raise the tax]."

And during a hearing on the tax proposal Sept. 9, the most recent of three the commissioners held, Mr. Short said that having a sales tax a half a percentage point lower than in neighboring Williams and Henry counties, which already collect the full 1.5 percent tax allowed, did not seem to have boosted Fulton County commerce.

Attendance was generally light at all three hearings that county commissioners held, starting Aug. 13, to explain the county's budget picture and the calculations they used to develop the sales-tax proposal.

During the Sept. 9 session, several speakers said the financial need appeared to be there, but the timing was poor or the county should also be rolling back property levies to offset some of the increase.

On Aug. 18, the county budget commission reviewed the various levies but rolled back only parts of school bond levies in the Evergreen and Archbold school districts. Evergreen's 1.15-mill bond levy was rolled back to 1 mill and its 6-mill bond levy was dropped to 5.75 mills.

For Archbold, the 2.6-mill bond levy was rolled back to 1.85 mills and the 1-mill bond levy was reduced to 0.9 mill.

Contact David Patch at:

dpatch@theblade.com

or 419-724-6094.