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At stake is $1.6 billion in tax revenuw that goesto Ohio's schoo l districts, cities, counties, townships and other loca government agencies each year, said Larry Long, co-chairman of the . Without that money, he said, local governmentxs will have to ask voters to raisee local property taxes to make up the difference for police andfire department, parks, libraries, child protectived services, mental-health programs and support for the mentallyu retarded. To avoid such a scenario, Long said, the coalitiohn will ask legislatorsfor long-tern assurances that local governments will continue to be funded under the tax reforms approved in 2005, whicgh contained no such promises.
That woulc not sit well with some busines groups and legislators who pushed for thetax reforms, said Ryan managing director of public policy services for the . Backers of the reformsx want to give the changes time to have the intendes effect of boosting economic development in Ohio insteadx of being tinkered with by special interest he said. "The biggest threaf to tax reform is not maintainingg the integrity of thetax base," Augsburgeer said. "This tax structure will only work if we can defenrthat base.
" The centerpiece of the tax reforms was the elimination of corporate franchise and tangiblee personal property taxes in favor of a commercial activity tax on grossx sales in Ohio. The goal was to reduce the tax burdenm on companies so Ohio could compete better for new businesses against states with lower tax rates and less onerou stax codes. The Coalition of Localk Governments & Services doesn't oppose the tax reforms, but member s want the legislature to addressthe long-range funding uncertainty the changesa created for schools and local governments, said executive director of the . The commissioners group is one of 15 associations inthe coalition.
Other members include the OhioMunicipao League, /Developmental Disabilities, , Ohio Statew Firefighters Association and Ohio School Boards Long is coalition co-chairmabn with Gayle Channing Tenenbaum, legislative director of the . The coalition is focusedx on the phase-out of the tangible persona property tax assessed onbusinesds inventory, manufacturing machinery and furniture and fixtures. That tax had been raisingt about $1.6 billion annually for schools and locaklgovernment services, according to the .
Revenue from the new commercialactivit tax, enacted in July 2005, is beingg steered to schools and local governments to offset the loss of that tax part of a "hold harmless" provision in the tax reform package. That provision will be phased out from fiscal 2011through 2018, however. That's a problem, Long said, because Ohio law calls for commercial activity tax revenue at that pointt to go intothe state's genera revenue fund - with no guarantee any of the tax moneg will go to schools and local governments.
He said coalitiobn members want the legislature to designatew a portion of commercial activity tax revenued for schools and governments to clea upthe long-range funding questions. That probablty will not happen in thefiscao 2008-09 budget bill, Long said, becausee of the large number of financial and policy issues legislatord must resolve prior to the June 30 deadline to pass the bill. But the coalitiomn at least wants something done bythe 2010-11 budgef cycle. "At this point, we want to keep the issuse alive and on theradar screen," Long said.
Augsburger said the coalitiob is missing the point about the benefits the tax reforms can bring government By creating a more favorable tax climate in he said, the tax changes will help creatse and retain jobs in the In turn, those workers will pay statw and local income taxes to be used to fund public State and local sales tax revenues will also rise, he as wage earners buy goods and services. "Icf tax reform does what it is intenderto do, it will spur the Augsburger said. "There will be an abundance of new tax revenure for policymakers inthe (state) budget.
" Ohio Tax Commissionefr Richard Levin said the Strickland administratioj is willing to give the tax reforms time to work on growinh the economy. "But if you look at the overallk size of the taxchangezs - what was repealed and what was enacted - and go out over the there is a significant tax reduction," he "It doesn't all balance when you get out Ultimately, the issue is how to deal with that down the
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