The word “new” is a bit misleading, supporters of a “new sales tax” say.
Voters will decide Aug. 4 whether to approve a quarter sales tax to support Allen County Regional Hospital.
It’s essentially the same tax voters approved 10 years ago, and for a similar purpose. The tax sunsets at the end of the year, so taxpayers are being asked to approve another one for the next five years.
The change is a zero-net increase in the county’s sales tax rate.
WHILE the purpose of the tax is very similar, things have changed a bit in 10 years. At that time, county and health leaders needed taxpayer support to help them build a new hospital. The hospital has been up and running since 2013, with more than $500,000 in support brought in by the county sales tax along with other sources.
In July, the hospital was leased to Saint Luke’s Health System. Under that agreement, Saint Luke’s would pay about $2 million in annual bond payments that were used to build the hospital, taking that burden off property taxes.
But the county still owns the property and is responsible for its upkeep. Under the agreement, Saint Luke’s estimated it would take a minimum of $450,000 per year to maintain the hospital and pay for necessary improvements.
The county will be responsible for the upkeep of the building, regardless. The question is where the money comes from.
If approved, the sales tax money will continue to collect an estimated $598,304 each year for five years.
If the sales tax is not approved, the county will need to come up with the money, likely through property taxes. It would take an estimated 3 mills of property taxes to generate the necessary amount of money, which means county officials could potentially increase property taxes or try to find savings elsewhere in the budget.
Supporters say sales tax is preferred because it applies to anyone who shops in Allen County, which means the cost is shared across all residents and visitors, whereas a property tax is paid only by local property owners.
“I think the sales tax is a fairer way of taxation,” Terry Sparks, chairman of the ACRH Board of Trustees, said. “I would love to see reduced taxes, but the bottom line is we have obligations in our county and our country that rely on those revenue streams.”
Compared to other area counties that have sales taxes, Allen County’s rate falls toward the lower end. The state collects 6.50 cents on the dollar, and counties can collect additional taxes on top of that.
Allen County: 7.75 (additional 1.25%).
Anderson County: 8.00
