Thursday, October 12, 2000

Ohio's state taxes lighter, but payers burdened locally

By Andrew Welsh-Huggins
The Associated Press

        COLUMBUS — Census Bureau figures show Ohioans pay less in state taxes than do people in neighboring states. But those numbers understate Ohio's tax burden because they don't include local taxes, the state tax commissioner says.

        Ohioans on average paid $1,614 to the state in the 1999 business year, according to Census Bureau figures released Wednesday.

        The Ohio figure includes income taxes and taxes on liquor and cigarettes, hunting and fishing licenses and motor-vehicle licenses.

        The figure doesn't include two major sources of revenue in Ohio: local property taxes and local income taxes, levied by cities.

        The latter tax alone would have added almost $270 to the per capita figure, said Tax Commissioner Tom Zaino. Few other states have local city taxes, he said.

        “We are heavily taxed compared to our peers,” Mr. Zaino said.

        The high taxes put the state at a disadvantage in recruiting businesses, he said.

        After Ohio, the next highest of the five neighboring states is Indiana, with $1,638. Highest is Michigan, with $2,365, according to the Census figures.

        Ohio collected $18.2 billion in taxes in the 1999 business year, up from $17.6 billion in 1998, a 3 percent increase. Tax revenues have increased 50 percent since 1992.

Revenues up 5% nationally

        Nationally, overall state tax revenues for the 50 states rose 5 percent last year to $499.5 billion.

        Individual state income taxes made up the largest chunk, totaling $172.3 billion, or $633 per person.

        Once local income taxes are included, most studies indicate that Ohio ranks near the top of taxing states, said Scott Pullins, executive director of the Ohio Taxpayers Association.

        Connecticut had the highest per capita state tax in 1999, $2,932 per person. New Hampshire had the lowest, $891 per person. Ohio ranked 19th lowest.

        Accountants say Ohioans may gripe about taxes but many know it could be worse.

        “A lot of clients we have have been to other states or have friends and families in other states — they get firsthand knowledge of what's going on there,” said Jeri Jones, a certified public accountant in Columbus.

        “Of course I think everybody thinks they pay too much tax, no matter where they live.”

Not always important

        Ed Hart said his largely upper-income clientele consider many factors before moving out of state to retire.

        “They're going to move where they want to go no matter what the tax rates are,” said Mr. Hart, an accountant from Columbus.

        “My father retired full time to Florida, and the bottom line was he wanted to live in Florida. People want to live where there's a better lifestyle.”

        Other neighboring states and their per capita state tax burden: West Virginia, $1,742; Pennsylvania, $1,799; and Kentucky, $1,857.


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