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Tuesday, July 1, 2003

Ohio: Taxes, fees start rising today


A penny for your thoughts

Independence Day may be July 4, but Ohioans get to "celebrate" a Dependence Day three days earlier. Today, our increasingly tax-dependent state will start taking extra nibbles from our wallets, thanks to lawmakers' desperate budget-balancing measures last month.

Today's most highly publicized change is the extra penny per dollar consumers will pay in sales taxes, a "temporary" two-year measure to help solve Ohio's fiscal crisis. The state sales tax rate goes from 5 cents to 6 cents. In Hamilton County, the effective tax will be 7 percent because of local add-ons. Cuyahoga County will have the state's highest sales tax at 8 percent. Meanwhile, the state gas tax goes up 2 cents today, the first stage in a three-year, 6-cent hike.

But it's not just an extra penny or two. A number of products and services that weren't subject to the sales tax at all will be starting Aug. 1 - satellite TV service, taxi rides, dry cleaning, tattooing, towing and more. That's when consumers will really start howling. Then on Oct. 1, Ohioans will pay $11 more for license plates and $12 more for driver's licenses; in January, basic local phone service will be subject to sales tax. And the Buckeye Institute, a conservative think tank, has identified at least 151 fee increases built into the budget that will make costs soar for licenses in dozens of professions.

It's a mess, and it's going to get messier. On Thursday, satellite providers sued the state, saying that taxing their services but not cable providers' is unconstitutional. It is a suit even state Tax Commissioner Tom Zaino says has a "significant chance" of succeeding. If a court throws out the satellite tax, the state will lose about $20 million a year, money it doubtless will make up by taxing consumers for something else.

Ohioans should put the blame squarely where it belongs - on the General Assembly. It rejected Gov. Bob Taft's broad-based tax reform that actually would have lowered some tax rates. After pressure from lobbyists, it took the easy way out by balancing the budget with regressive taxes that hit lower- to middle-class consumers the most. Call it penny-wise, pound-foolish.




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