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Columbus
Dispatch...
Senate panel passes
bill to eliminate estate tax
Local governments fear loss of additional revenue
By Jim Siegel
Friday, April 15, 2011
A bill to eliminate Ohio’s estate tax in 2013 passed a Senate committee
yesterday, a move local governments see as another potential blow to
their already strained budgets.
But supporters say it’s time for Ohio to eliminate a tax that they say
drives wealthy seniors out of the state.
“Repealing Ohio’s death tax will help keep more of our family farms in
business, and it will also help keep more of our small business owners
and the jobs they create here in Ohio,” said Sen. Kris Jordan,
R-Powell, the sponsor of Senate Bill 90.
An identical bill passed a House committee in mid-February but has not
yet come up for a full House vote. GOP leaders in the House and Senate
say they want to eliminate the estate tax, but they first want to
finish up the two-year budget to get a clear understanding of the cuts
that governments will face.
Estates valued above $338,333 - about 7 percent of estates - are
subject to the estate tax when the owner dies. The threshold is the
lowest in the nation.
Sen. Charleta B. Tavares, D-Columbus, said Democrats were willing to
increase that threshold, particularly on farmers. But she will not back
an outright repeal at a time when local governments face deep cuts in
Gov. John Kasich’s two-year, $55.5billion budget.
Local governments get 80percent of estate tax revenue, about $250
million a year, compared with 20percent for the state ($60 million).
Kasich’s budget would cut local-government funding by 25 percent per
year, reducing it from $665 million this year to $339 million in 2013.
It also accelerates the phase-out of reimbursements for lost tangible
personal-property taxes, cutting local governments an additional $312
million.
“We’re helping people who don’t need the help,” Tavares said, adding
that there is no hard evidence that the estate tax is driving people
out of Ohio. “We’re benefiting the very wealthy in the community, and
even the family farms can pay it off over 10 years.”
Clarence Coleman, the Toledo city tax commissioner, told lawmakers
yesterday the city would lose $3 million to $4 million a year from
eliminating the estate tax. On top of the other cuts and lower local
tax revenue, “it may simply be too much for many cities to handle in
the current economic climate.”
Sen. Kevin Bacon, R-Minerva Park, who also is a probate attorney, said
local governments would not start feeling the impact until mid-2013,
and the loss would be gradual as estates of those who die before Jan.1,
2013, work their way through the courts.
“It’s not very hard for the average person, when they die, to hit that
threshold,” Bacon said. “Many people aspire to accumulate that amount.”
Read it at the Columbus Dispatch
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