Ohio City Contemplates Local Beer Tax

Published February 1, 2007

City officials in Kent, Ohio may seek authority from state lawmakers to levy a local tax on beer, one of a number of options under consideration to boost city revenues.

Councilman John Kuhar (I) raised the idea of a local beer tax late last year, but as of press time the idea had not advanced as a formal request to lawmakers.

Kent’s law director is researching what changes might be needed to state law to allow for the imposition of local “sin” taxes.

Regardless of the law director’s conclusions, a local beer tax is not a done deal, according to Kent City Manager David Ruller.

Not Yet Ready

“Don’t get me wrong, we’re very interested in exploring as many different options as possible for solving our fiscal challenges, and there is interest in exploring the idea of a sin tax by City Council, but the media reports seem to suggest that we’re ready to implement a sin tax next week, which isn’t exactly accurate,” Ruller wrote in a November 28 blog posting at Kent360, a blog he runs to discuss city business.

“I keep reiterating that this is just an item we’re being asked to research at this point, and our Law Director is doing just that, but we are nowhere near a position to recommend to Council whether or not to pursue such an option,” Ruller wrote.

Informal Poll Shows Support

Kuhar has suggested a tax of 4 cents for each beer served at drinking establishments.

In a Kent360 blog posting December 2, Kuhar wrote, “Prior to any mention of the beer tax I interviewed well over 100 local beer consumers about their opinions and I was happy to hear that all but three supported the idea.”

Kuhar added, though, that some people said “they had concerns that the money would be squandered if it was not earmarked. One group of KSU [Kent State University] students suggested earmarking most of the funds to reimburse our safety forces for extra public activities and overtime and mutual aid needed to quell disturbances caused by wild parties etc.”

Kuhar also pointed out that beer tax money could be used for “road repairs, sidewalk installation and repair etc. and other needed items” that need funding.

High Taxes Noted

David Hansen, president of the Buckeye Institute, said taxes are already too high in Ohio.

“Ohio has gone from 47th to third-highest state and local tax burden in the country in a generation,” Hansen said. “We’ve gotten ourselves into this hole because of so many small tax hikes like this. Local governments all over Ohio pursue a policy of small, incremental tax increases tied to special interest benefits or special ‘needs,’ and all together these tax increases create an environment that makes it extremely difficult [for businesses] to be in Ohio.”

Among other taxes currently in effect in Kent, Hansen noted, is a local 2 percent tax on gross income.

“There has been a significant loss of economic freedom in Ohio because of taxes like this,” Hansen said. “Is it any wonder we’re not adding jobs and are losing people? I would ask, ‘Has Kent worked hard at reining in the costs of public employees in their city? Have they competitively outsourced things like street maintenance? City garage services? Fire hydrant maintenance? Other services?'”

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.