Small sales tax could help ease budget crunch

8:39 PM Friday, June 26, 2009

Members of the Ohio House and Senate are meeting in conference this weekend to try to reconcile the state’s budget, facing a Wednesday deadline and one of the ugliest economies in decades.

Right now almost everything is on the table. Gov. Ted Strickland has made it known he would not oppose language in the final budget bill that would allow slot machines to be placed at race tracks around the state. He’s also recommended cuts to the state’s library funding that in some cases would result in a 50 percent budget cut immediately.

Clark and Champaign county library directors have said the move would be disastrous, and have gone bonkers this week getting their patrons to flood the statehouse with their calls, e-mails and visits.

In light of everything else being on the table, a one-cent sales tax increase should also be part of the solution.

A statewide sales tax increase of one cent per dollar would raise about $1.2 billion a year. A half-cent increase would bring in an estimated $600 million.

There is an estimated $3.2 billion gap for next year between what the state projects it would bring in and what it will spend. That sales tax increase would still leave plenty of room for legislators to exact cuts to state agency funding, but it would take a little of the sting away.

It could specifically go a long way in blunting the library cuts, something that simply must be done. Library funding may need to be cut, but a 50 percent hack is unacceptable. Libraries are close kin to schools in this state’s battle to educate its residents. They are the depositories of knowledge for young and old alike. With public computer banks, they have done wonders at providing a glimpse of the modern online marketplace of ideas to people who may not have a computer at home. They are refuges — especially during the summer months — for children who like to read and may have few other safe places to do so.

The drawbacks to a sales tax increase are well-known.

Sales taxes are regressive — low-income residents pay a higher percentage of their overall income toward the taxes than do people with more money.

Communities near border states will face the prospect of people choosing to shop on the other side of the state line.

And Ohio is already down-at-heel when it comes to attracting residents and businesses and more, higher taxes will hardly be something to put on the front page of the brochure Ohio gives to business leaders.

But a statewide increase would keep in place any differences between counties. Clark and Champaign counties now charge 7 percent total; Greene and Miami counties charge 6.5 percent and Madison charges 6.75 percent.

An increase of 1 percentage point would raise the sales tax in Clark and Champaign counties to 8 percent. A half-point increase would put it at 7.5 percent.

We’ll leave it for later debates as to whether cuts to some of the state’s operations are the right ones — close some state parks or a prison? But for now, a small sales tax increase should be part of the solution.

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