MANSFIELD – The one-year county sales tax increase from the Richland County Commissioners officially expired on Thursday, June 30.
Approved by the commissioners in April 2015, a 0.25 percent county sales tax increase that began on July 1, 2015 has now run its course. The sales tax for the county increased from 7 to 7.25 percent over the last 12 months, and will now return to 7 percent.
The goal of the sales tax increase was to generate an estimated $3 million in sales tax revenues. According to Commissioner Marilyn John, the county is on track to hit that goal.
“From just the extra quarter percent sales tax, we collected $1,103,031 from September 2015 through the end of the year,” John said. “In 2016, from January to May, we collected an extra $1,762,760.”
Combined, that makes a total of $2,865,791 collected just from the 0.25 sales tax increase from September 2015 through May 2016. John noted the sales tax would continue to be collected through September 2016 to round out a full year of revenue generated.
Before the county sees any revenue, all sales taxes are processed at the state level and returned on roughly a 75-day delay. Therefore, sales taxes from June 2016 will not be returned to the county until September 2016.
“That paid for expenses that had already been approved,” John said. “That’s not money going into an account and sitting there, that’s money being spent.”
John explained the revenues generated from the quarter percent sales tax increase go into the general fund. Currently the general fund has a balance of approximately $31 million, with 70 percent of the fund going towards salaries and benefits of county employees.
The sales tax increase was a necessary measure after the commissioners passed the budget for 2015 and discovered the county had $1.2 million in expenses over revenues. Commissioner Gary Utt stated last year that the county would not have enough money to make it through the year without implementing an emergency sales tax.
John stated that coming into 2015, the county only had a carry over of $473,000.
“That’s really low,” she said. “The Government Fiscal Officers Association’s recommended carry over amount is two months of expenses, which for us is $5.5 million.”
Looking at the county’s $31 million budget in the general fund, John divided the budget by 365 to equal $85,000 per day in expenses for county government just out of the general fund. With only a $473,000 carry over, that only covers six days’ worth of expenses.
Additional cost-cutting measures have not yet been discussed in detail. Last year, in addition to increasing the county sales tax by 0.25 percent, the commissioners also consolidated services with the Richland County Sheriff’s Office and implemented a spousal carve out within the county’s self-insured health care plan.
One thing for certain, the sales tax will not increase solely by commissioner action. John explained the only way the sales tax increase could be made permanent is through the voters of Richland County.
Unfortunately, future adjustments from the federal government that are currently pending would be out of the commissioners’ hands.
“We’re estimating right now that’s going to have an impact of approximately $1.2 million lowering of our sales tax,” John said. “Hopefully by then we will have recovered enough of the sales tax that it won’t be as big of an impact, but it’s still out there.”
In the meantime, the commissioners face a difficult budgeting session for 2017. Currently, mid-year requests are already $7 million over what the estimated revenues for 2017. This fall, after the end of collections in September and before 2017 budget talks begin, the actual benefit of the sales tax increase will become more clear.
“We do know were able to pay all of our bills. We kept the county running,” John said. “It was a necessary increase.”
