WILMINGTON — A lower sales tax rate goes into effect in Clinton County on Oct. 1, but its duration may shrink because of an elimination of Medicaid sales tax revenue that starts next summer in Ohio.
Currently, Clinton County’s two local sales taxes add up to 1.5 percent — one sales tax of 1 percent, and a 0.5 percent sales tax that will expire on the last day of September when the tax’s five-year term ends.
But starting in July 2017, Ohio can no longer apply a sales tax to Medicaid managed-care organizations. And that means a reduction in sales tax revenue for the state and its counties.
At a Wednesday meeting with Clinton County commissioners, Clinton County Chief Deputy Auditor Carol McFall said the reduction in Medicaid sales tax revenue for Clinton County reportedly will be about $840,000 a year.
Clinton County Commissioner President Mike Curry said when commissioners decided earlier this year not to renew the 0.5 percent county sales tax when its term concluded, the thinking was that the county could probably sustain its services without a second county sales tax “for probably about two years.”
However, with this summer’s news about the Medicaid tax change, Curry said he doesn’t know how long the county can stick with the one remaining county sales tax of 1 percent.
“One of the things we need to talk about is how long that [an additional sales tax] can be left off, and also whether a quarter [o.25 percent] is enough, or we have to go back with a half percent [0.5 percent],” said Curry. “We just don’t know at this point in time because of this [Medicaid] development.”
Curry noted that state officials have said they are going to try to make counties whole on their losses of the revenue.
“But I don’t know how they’re going to be able to accomplish that when they’re losing [Medicaid sales tax] revenue also,” the commissioner president said.
Clinton County Commissioner Patrick Haley is hoping the Kasich administration and the Statehouse will come up with a solution for the counties.
Haley added he knows the effect the change will have on county budgets around the state is “not going unnoticed in the state Legislature.” He also said he is in favor of reducing the local tax burden.
Clinton County Commissioner Kerry R. Steed said the pending elimination of the Medicaid sales tax revenue will complicate things budget-wise.
The state’s sales tax rate is 5.75 percent. Presently, Clinton County’s two sales taxes add up to 1.5 percent, or a total sales tax rate of 7.25 percent in the county.
Come Oct. 1, the new total sales tax rate in Clinton County will be 6.75 percent.
Last year, the county’s 0.5 percent sales tax generated about $2.8 million.
Reach Gary Huffenberger at 937-556-5768 or on Twitter @GHuffenberger.