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Dayton Daily News...
Communities’
officials want to keep estate tax
Kettering, Oakwood and Washington Twp. officials say repeal may hurt
their residents.
By Jeremy P. Kelley, Staff Writer
Sunday, March 13, 2011
Several local communities are working with an emerging “council of
governments” to lobby against the proposed repeal of Ohio’s estate tax,
despite opposition from local Tea Party-affiliated groups.
Administrators from Kettering, Oakwood and Washington Twp., communities
that received a combined $6.2 million in estate tax revenue last year,
have worked on a steering committee to start the government group.
Oakwood and Washington Twp. already have agreed to pay $5,000 and
$2,500, respectively, to help the Council to Protect Ohio’s
Communities, but Kettering City Council put off that decision last week
when 30 members of a Tea Party-affiliated anti-tax group attended a
council meeting to oppose the idea. A majority of council told City
Manager Mark Schwieterman to keep participating in the group’s
conference calls, but would not approve $5,000 to join the CPOC.
Impact of the tax
Eric Weber, a Kettering resident and president of the Southern
Montgomery County Liberty Group, called the estate tax “an immoral tax”
in comments to Kettering City Council last Tuesday. He said the $80,000
in estate tax paid after his father-in-law’s death could have been
used, instead, to hire workers at the man’s company, C&M Rubber,
which Weber now helps run.
“We are taking money from our children and taking money from the
business community,” he said.
But some government officials are just as sure that a repeal of the tax
would hurt their residents as a whole. Kettering averages about $3
million in annual estate tax revenue and uses it to leverage millions
more in state and federal grants for roadwork and other citywide
projects.
Oakwood city government operates at a structural deficit, with major
cuts or tax increases averted only by occasional huge estate tax
windfalls, like the $9.9 million in 2007.
“Whether or not a city or individual citizens believe philosophically
that the estate tax is right or wrong, it is irresponsible to propose
radical change to it without very carefully considering the
consequences,” City Manager Norbert Klopsch said.
How the tax works
Ohio is one of 18 states that levy an estate tax separate from the
federal estate tax. Ohio’s rate is 6 percent on the portion of taxable
estates worth between $338,333 and $500,000 and 7 percent on estates
with values more than $500,000.
According to state data, about 7 percent of Ohio estates are subject to
the tax, with 20 percent of proceeds going to the state and 80 percent
to the community where the deceased person lived. Last year, $55
million went to the state, and $230 million to cities.
This year’s House Bill 3 originally proposed immediate and complete
repeal of Ohio’s estate tax. The House Ways and Means Committee, in a
9-8 vote last month, approved an amended version that delays the repeal
until 2013. But that bill has not made it to the House floor.
The government group opposing the repeal, the Council to Protect Ohio’s
Communities, is being led by the affluent Cleveland suburb of Shaker
Heights, which has fronted $150,000 to hire a lobbyist (Government
Strategies Group) and a public relations firm (Burges and Burges), with
other cities pitching in.
Backers, opposition
Kettering resident Ron Alban, co-founder of a statewide petition
campaign to end Ohio’s estate tax, said it was revealing that the
anti-repeal testimony to the state legislature came from government
organizations, not private citizens. He said his group secured 83,000
citizen signatures for the repeal.
“We’re serious people, and we will not be denied,” Alban said.
Kettering Mayor Don Patterson recently testified in Columbus on how
estate tax repeal would hurt Kettering’s budget. Although much of the
region voted Republican in November, and the estate tax repeal is a
Republican-driven issue, Patterson said he doesn’t take that into
account.
“I don’t take up the cause just because it’s a Republican cause or
Democratic cause,” Patterson said. “I take it up (for) what’s right for
the city of Kettering. Sometimes those things can run a little counter
to what my personal beliefs are. I hope that I’m a big enough person to
realize that just because I believe it, doesn’t automatically mean it’s
the right answer.”
Strong opinions
Klopsch said a repeal of the estate tax would result in local cities
raising taxes to make up the difference.
“Governor Kasich, who many of us support, has made this promise to not
raise taxes, but if the estate tax is abruptly and totally eliminated,
the end result will be, I guarantee, an increase in taxes to hundreds
of thousands of Ohioans,” Klopsch said.
Dayton Tea Party founder Rob Scott said budget cuts would be a better
response. Asked if he would be OK with half as many roads being paved
or half as many park programs being offered, Scott was open to the idea.
“If that’s what has to happen, that’s what has to happen,” Scott said.
“As demonstrated in November, right now our populace is ready for tough
love. Make the cuts necessary, and if we don’t like it, (control) will
flip back. That’s why we have elections. ... You cannot tell me there
are not ways to cut costs. There are always ways.”
That talk angers Klopsch, who thinks “a supermajority” of Oakwood
residents would disagree with making drastic cuts.
“It’s easy to say those words, but I welcome anybody to come here and
spend a couple hours, look at what we provide, all the cuts we’ve
implemented in the last nine years, and I think they’ll walk out
feeling differently,” he said. “I’ve got the facts, the proof, not just
words.”
While Scott feels overtaxed, he acknowledged that many disagree, as all
local income and property taxes were approved by a majority of voters.
“We’re working on that,” he said.
Read it at Dayton Daily News
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