Estate-tax demise will add to Boardman financial woes
By Ashley Luthern
The township has collected about $650,000 from state estate taxes this year, more than half of what it estimated it would receive in all of 2011.
But officials already are looking ahead to 2013 when there will be no estate tax.
The original estimate in the 2011 township budget for estate-tax revenue was $600,000, but the final township budget estimated it would be about $800,000, said Fiscal Officer William D. Leicht.
Gov. John Kasich signed the state’s budget Thursday, which included a provision to abolish the estate tax Jan. 1, 2013.
Rob Nichols, Kasich’s spokeman, said he “absolutely” stands by his earlier statements that the Ohio estate tax “is one of the most punitive taxes out there.”
“We’ve given local governments many tools to deal with shrinking state income,” Nichols said, citing the collective-bargaining law Senate Bill 5 and incentives to share services among local governments.
Township Administrator Jason Loree said SB 5 is “not a sure thing.” Last week, 1.3 million signatures were turned in on petitions calling for its repeal.
“That is not something that I would say is an accurate depiction of giving us a tool,” Loree said. “Boardman gets a large portion from the estate tax, and we have been for years, and it’s been used as a revenue source for operations, and it’s going away so quickly.”
He added that township employees already pay 15 percent or more of their health-care costs. SB 5 includes a provision for public employees to pay 15 percent of their health care.
“We’ve been working with our unions and shown them where we’re at financially,” Loree said.
Leicht said he anticipates the township will receive $300,000 to $400,000 in estate tax in the second half of the year. On average the township receives between $900,000 to $1.2 million in estate tax annually. The township’s total budget for 2011 is $17.1 million.
The estate-tax revenue is in the general fund for operations, Leicht said.
From 1995 to 2005, “that money was used to fund the growth in the township,” he added.
Loree said the loss of the estate tax and cuts in state funding to local governments is part of the reason trustees have placed a 3.85-mill, five-year additional police levy on the Aug. 2 ballot, which would maintain and bolster the police department.
The levy “will help us deal with some of the shortfalls,” he said.
The Ohio estate tax was established in 1893 and applies to estates valued at more than $338,333. The tax revenue is divided, with 20 percent going to the state and 80 percent to the township or municipality of residence at the time of death. In 2009, about 8,000 estates, or 7 percent, qualified for the tax, according to the Ohio Department of Taxation.
In 2010, the estate tax yielded $936,564 for Youngstown; $637,585 for Austintown; $400,000 for Canfield; $255,875 for Canfield; $128,000 for Poland Village; and $99,000 for Poland Township.