Published: Thursday, 27 July 2017 17:00
By Cheryl Splain, KnoxPages.com Reporter
MOUNT VERNON - Inactivity on the part of the Ohio Senate means a temporary reprieve for residents when it comes to the sales tax added to local purchases.
The county commissioners planned to impose an additional ½ percent sales tax in October but have decided to hold off until January. They are waiting to see whether the senate agrees with an Ohio House override of a provision in Gov. John Kasich's budget that aims to address revenue counties lost when the federal government eliminated a sales tax on Medicaid managed care organizations.
Knox County stands to lose $500,000 a year due to the elimination of the MCO tax. This loss is part of the reason the commissioners decided to raise the county sales tax.
The budget provision calls for the state to seek federal approval to increase a tax on health insurers from 5.8 percent to 7.8 percent. Kasich vetoed the provision because it jeopardizes $1.2 billion in Medicaid funding. The Ohio House overrode Kasich's veto on July 6. It is now up to the senate to agree with or reject the house override.
“We are still watching the legislature,” said Commissioner Teresa Bemiller. “The senate didn't come back yet, and they probably won't until the end of summer.”
In a senate conference committee, an amendment was inserted into the provision that gives states an additional six years to prepare for the loss of revenue from the MCO tax. The six-year hold harmless amendment requires a new waiver from the federal government.
Ohio's current 5.8 percent waiver is one of two nationwide and the highest rate the federal government has ever granted. A 7.8 percent waiver is unprecedented. To successfully reinstate the lost county revenue, the senate has to override Kasich's veto, Kasich has to ask for an additional waiver and the federal government has to approve the highest tax rate it has ever granted.
“All of the stars would have to align for us to be held harmless for six years,” said Commissioner Thom Collier. “I can't say I'm particularly hopeful. If it doesn't happen, then we are back where we started.”
“The consensus is that since we are still waiting to hear, we will wait until January to impose the sales tax,” said Bemiller. “We wish the senate would come back sooner, but right now we are just waiting and trying to determine what our action will be.”
Delaying an increase in the county sales tax until Jan. 1, 2018, means the county will not receive any money until March 2018. The county will, however, receive $472,792 in November as part of a one-time payment from the state designed to make up for losing the $500,000 annual MCO revenue.
Published: Tuesday, 25 July 2017 09:57
By Cheryl Splain, KnoxPages.com Reporter
MOUNT VERNON — After adding specific language about how the money will be used, City Council members approved placing a ½ percent income tax increase initiative on the November ballot. Council amended the legislation state that the money generated by the increase will be “for the purpose of current expenses and capital improvement needs for the police and fire departments.”
Councilman and Finance Committee Chairman Sam Barone said that after hearing comments from the public and council members, the finance committee recommended that the estimated $3.4 million generated by the ½ percent increase be directed solely toward police and fire rather than being divided between capital improvements, the general fund and roads/bridges.
He said that with the exception of adding three firefighters as promised to Liberty Township trustees when the city took over township coverage and one drug interdiction officer requested by the Mount Vernon Police Department, if approved, the additional money will go to underwrite existing police and fire budgets. It also gives the city a mechanism to set aside money for future capital improvements such as a fire substation and a new police building.
If the voters approve the increase, it will free up around $3.2 million in the general fund that is being used to subsidize the police and fire budgets. That $3.2 million will then be put toward deferred maintenance and other infrastructure projects identified in a 10-year plan created by the City Finance Group.
“It's not an overstatement that passage of this ½ percent is of paramount importance to our city,” said Barone. “Failure on our part to educate the public on the need for this ½ percent will lead to dire consequences.”
The tax applies only to earned income.
Council suspended the third reading of the legislation so that ballot language can be submitted to the Knox County Board of Elections by its Aug. 9 deadline.
By a 5 to 2 vote, council members declined to suspend the third reading of an ordinance banning the sale and growth of medical marijuana within the city limits. Council gave the ordinance its second reading. Councilwoman Nancy Vail said she does not plan to hold any more public hearings on the issue; further discussion will take place at the third reading.
Council members suspended indefinitely an ordinance that would have placed another issue on the November ballot. Barone said that although he heard support at a public hearing for a commission to study the idea of creating a charter government, he also heard comments about the challenge of putting the issue alongside the tax issue. Saying he is still convinced the city needs to move toward charter government, he said, “But I respect the feelings about merging the issues on the same ballot.”
In other business, council:
*Authorized the city auditor to transfer funds
*Approved the reappointment of Gail Labenne to the Historical Review Commission and the appointment of Charles Wendt to the Civil Service Commission
*Authorized appropriations which include $18,000 from the Arms of an Angel Foundation for a K-9 police dog
*Authorized the city to sell a city vehicle no longer needed
*Approved the addition of a part-time person in the water/wastewater department
*Gave a first reading to the Type 2 annexation of 3.249 acres from Clinton Township into the city. The acreage is on Ohio 13 near the Commerce Drive intersection