County recorders oppose Taft's plan to double fees
They say it's not fair to fund the state housing program from the wallets of local home buyers.
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VINDICATOR COURTHOUSE REPORTER
YOUNGSTOWN -- County recorders in Ohio are bracing for a battle with the state over a proposal to double the fees people pay for recording documents like home mortgages.
They say it would unfairly burden homeowners, who are already trying to cope with sagging economic conditions. They also don't think it's fair that 99 percent of the extra revenue would be paid to the state to fund a low-income housing program.
"If they increase those fees, then I will post a sign in my office telling people that they can thank [Gov.] Bob Taft, because he's the one pushing for this," said Ron Gerberry, Mahoning County recorder.
It's not unusual to have fees from $60 to nearly $100 for recording a mortgage, Gerberry said. If the fees are doubled, home buyers would have to absorb the additional cost.
Seeking a revenue stream
Tim Keen of the Ohio Office of Management and Budget said the state has been looking for a steady revenue stream to fund its Housing Trust Fund, established in 1991. The fund primarily provides money for construction of housing for low-income people, Keen said.
It currently gets its revenue from the state's general fund, but Keen said state officials have been looking for some time to find another dedicated funding source.
They chose recorder fees because they believe the source should be "some fee associated with housing purchases."
If the Legislature approves the proposal, it would go into effect sometime after July 1, in conjunction with the state's next two-year budget. Gerberry said the Ohio Recorders Association is battling to have the proposal removed from the budget bill.
'A hidden tax'
Gerberry and his colleagues in neighboring Columbiana and Trumbull counties said they don't like the idea of having to impose higher fees in their already cash-strapped counties. Nor do they like the idea of sending the extra money to Columbus when it could be used locally.
"It's a hidden tax being imposed on the home buyers," said Jeff Hochadel, Columbiana County recorder. "It's another mandate that the state wants to throw down on local governments."
Making more work
Diana Marchese, Trumbull County recorder, said it would create a hardship on her office. Because of a countywide budget crisis, Marchese said she'll have to lay off more than half her 10-person staff later this year.
She said if the measure is approved and the increases are implemented, recorders will have to create new bank accounts to hold the state's money and incur more processing work.
"Now you tell me, how can I handle that additional work with less staff?" Marchese asked. "I'm against it. It's not right."
Keen said the measure would allow counties to keep 1 percent of the additional revenue to help offset their administrative costs. However, Marchese said the language of the bill indicates that the money would go to the auditor, not the recorders.
Keen said the OMB projects the fee-doubling would generate about $36 million in its first year and $48 million in the second year.
But Hochadel and Gerberry said recording fees vary from year to year, so the state can't possibly rely on a steady income stream. Collections have been high the past two years because of low interest rates, which has spurred thousands of people to refinance their mortgages, Gerberry said.
"But that's already starting to slow down," he said. "We don't know from year-to-year how much we're going to take in."
Keen said the state took that into consideration when making its estimates and still feels that doubling the fees is the best alternative. He said the state can't continue to carry the load.
"If the Housing Trust Fund is going to be supported, the revenue is going to have to come from somewhere," Keen said. "This seems like a reasonable source."
Gerberry said if the state believes in the program so strongly, it should continue funding it with general fund dollars. If the state wants to increase recording fees, it should let counties keep the additional money.
"But I really don't agree with doubling the fees, even in that case," Gerberry said. "I think it's outrageous."
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