On December 9, 2015, the Clark County Commissioners held a public hearing on the possible renewal, reduction, or elimination of the temporary 1/2% sales tax that expires on December 31, 2016 for all purchases made in Clark County. Nathan Kennedy, County Administrator, opened the meeting with a review of county services and finances.

According to Kennedy, the general fund, which is the fund that is supplemented by the sales tax, supports many services provided by the county. The services include law enforcement and the courts, building and grounds, financial services, human services, administrative services, and the engineer department. Of these services, law enforcement and the courts account for almost 60% of the expenditures. Fifty percent of the expenditures fund employee salaries with an additional 23 % for employee benefits.

The 1% permanent sales tax generates 41% of the revenues the county government receives. The 1/2% sales tax generates almost 21% of the revenues.

Kennedy pointed out that with the downturn in the economy, investment income that the county depended on has dropped 78%, coupled with a loss of $1.7 loss in local government funds because of changes in the state’s allocation of funds.

In the past, the 1/2% sales tax has been used for several capital improvement projects including new financial software, and capital improvement plans including maintenance of equipment and renovations to the A.B. Graham Building, the Courthouse, and the Security Debt Service. With the renewal of the sales tax, Kennedy projects that the revenue will remain above expenditures for the next five years; however, if the sales tax is decreased to 1/4% or allowed to expire, the expected expenditures increase above expected revenues by 2017. If this occurs, the county will need to reduce services, halt all renovation projects, and cancel capital improvement projects. With the discontinuance of the sales tax, the most severe reduction in services would occur in the sheriff’s office and the criminal justice system with projected layoffs of 100 to 125 people. Since the Sheriff’s Department is the county’s largest employer, the department would be most affected by the layoffs.

Kennedy proposed several alternatives including a property tax, economic development, cutting hours, salaries and benefits, cutting all non-mandated services, and applying for grants for general operations. However, none of these sources would sufficiently make up the shortfall in revenues without the 1/2% sales tax.

Kennedy said that the state law allows counties to levy up to 1 1/2% sales tax, but only allows the county to levy them at 1/4% increments. He also pointed out that the sales tax is not levied on essentials including food, medical care, prescription drugs and housing.

Currently, the total sales tax in Clark County is 7.25%. Of this the state collects 5.75%,, with the remaining 1.5% divided by a 1% permanent sales tax and 1/2% temporary sales tax collected by the county.

Kennedy pointed out that for an individual who purchases a $6 lunch the sales tax amounts to 3 cents and $1 on a $200 TV.

In order to avoid a budgetary imbalance, Kennedy recommends that the commissioners continue the 1/2% sales tax for 10 years to allow the county to pay off debt, complete some much needed capital improvement projects, and not increase spending unless mandated by the state.

After Kennedy’s presentation, the commissioners opened the floor for comments from residents on the proposed tax. Daniel Harkins, Attorney, spoke in favor of eliminating the 1/2% sales tax. According to Harkins, Clark County’s current rate of 7.25% is a regressive tax that increases the cost of conducting business in Clark County and places an unfair burden on lower income individuals. He argued that the Clark County sales tax has hindered economic activity and contributed to the decline in population in the area. He also stated that many government functions are duplicated by Clark County and municipalities and should be combined to decrease costs. He said, “The combined functions and/or unified local government would lower taxpayer costs, improve constituent service and promote economic growth.” He recommended that the commissioners eliminate the tax rate in order to increase the county’s competitiveness and promote economic growth.

Harkins also suggested that the county reduce the number of judges and combine support services for them. He also proposed reducing the size of the law library and consolidating the three county buildings that provide services to the community into one location. He said, “This will reduce the need for security and make it more efficient for county residents to navigate these services.”

Richard Lohnes, Commissioner, responded to his suggestions, “We have already entered discussions about solidifying the law library, reducing deputies and bailiffs, and using video arraignments to reduce the movement of prisoners back and forth.”

After Harkins completed his presentation, Sheriff Gene Kelly spoke for the renewal of the sales tax. He said, “I started with the department win 1987. I have lived through a period in which we only had two cars. During the 90s everything was cut. We had one nurse, and only two deputies. We now have 16 nurses, 4 dispatchers and 25 new security guards. Much of the expansion has been mandated. Although the crime rate has decreased, we have the sickest population we have ever had in jail. Twenty to forty percent of the inmates have mental health issues. In addition, the population in the county has shifted from Springfield to the 10 townships. I believe we are going in the right direction. We have the best fleet on the street, training that is second to none, and crime rate is down almost 22%. We have consolidated many services and are working smarter. Clark County is the best I have ever seen it. I sell Clark County every single day. The sales tax is the fairest tax; I recommend that we renew it for 10 years.”

Next, Ed Dow spoke against the tax. He recommended that the county determine what is really needed as opposed to what is wanted. He suggested the county tighten its budget rather than levy taxes.

Last, Chris Price spoke. He said, “Economic development is the key not taxes.”

The next public hearing on the proposed sales tax is scheduled for December 16, 2016 at 10:00 a.m. in the Public Chambers at 50 E. Columbia Street.