Hamilton County Leaders Eye Sales Tax Increase To Deal With Projected Deficit

Feb 13, 2018

A sales tax increase is on the table as Hamilton County leaders warn of a $20-30 million budget deficit for 2019. County Administrator Jeff Aluotto says it will be the worst deficit since the great recession.

Aluotto blames decreased revenue from the state and increased costs.

"We can balance based upon reductions to expenditures. The reductions that would be required are significant. We could balance on revenues, either increased revenues on our existing revenue stream or more likely new revenues or some combination of both."

Aluotto says one option for a new revenue source is an increased sales tax. The county has authority to raise the local sales tax by up to a quarter of a cent.

He says there's only so many options for increasing revenue.

"Our discretionary revenue that is remaining to the county comes in two forms. We have a mill left on the transfer tax, and we have capacity left on the sales tax that can be raised up to a quarter of a cent at tenth of a cent increments."

Aluotto estimates a quarter cent sales tax increase would raise about $35 million. An increase of the transfer tax would generate about $4 million.

He says there isn't much time to decide.

"There would not be time to put something in place in 2019 to collect a dime worth of revenue in 2019. We have to decide in mid-June where we're going with this problem."

He says if the county decides to cut spending to meet the deficit, departments would also need to know early enough to make adjustments.

Aluotto says there will be public hearings in April to discuss the county's options.

An increased sales tax wouldn't be the only new request this year. The Southwest Ohio Regional Transit Authority is considering asking voters for a new sales tax for improvements to Metro. The Public Library of Cincinnati and Hamilton County is introducing a new property tax levy in November.