Hamilton County Commissioners Hear About State Funding And Sales Tax Growth

Sep 10, 2019

As Hamilton County officials look to balance next year's operating budget, they're getting a little help from Ohio lawmakers.

Some extra money for counties was included in the state budget.

County Administrator Jeff Aluotto said it was targeted at specific programs like public defenders. There was no dramatic increase in the local government fund

"We are unlikely to see wholesale corrections or restorations to the local government fund," Aluotto said. "So that means we may have some victories along the way and some helpful actions at the state level but nothing that is likely to save or rescue the county from a structural deficit. We're not going to see the local government fund reappear next year with a $13 million restoration."

Aluotto proposed a budget that would keep the county's sales tax rate at 7%, meaning the Union Terminal tax increase that's set to expire at the end of March would continue and be used to fund county operations.  

The county's sales tax revenues are not what they used to be. Officials say from 1971 to 1999 they grew about 7.36% each year. From 1999 to 2018 that annual growth rate dropped to 1.47%.

County Budget Director John Bruggen has one theory as to why.

"What appears to me here is that the state sales tax base, what we are taxing, is not shifting as the economy has shifted," Bruggen said. "Something fundamentally has changed about the economy that the sales tax is applied to that has put us in a situation where we are not seeing the growth in that revenue source that we saw for the first 30 years that it was in place."

County commissioners will hold a series of public hearing on the budget early next month.

Meanwhile, Aluotto said the first part of an independent review of the county's finances will be available next month, "benchmarking us against other peer counties, looking at workload indicators of where there might be efficiencies to be gained, and also looking at revenue possibilities as well."

That's  expected to come before the board in staff meeting on Oct. 1.

Commissioners must approve a 2020 budget by the end of the year. A vote is expected sooner than that so departments can make preparations for implementation.