Krebs presents equalization fund

By Kelsey Kimbler -

EATON — Morning Sun native Gene Krebs is running for the Ohio Senate seat currently held by Bill Beagle and he has an Equalization Fund he believes can get him there.

He presented information about this fund to the Preble County Board of Commissioners during their meeting on Monday, Jan. 29.

According to Krebs, it is his goal to help rural communities help themselves by identifying those who are not generating a sufficient amount of tax revenue from economic development activities, and then giving them targeted state funding so they can put those funds back into their own community in any way that they see hit.

“There is an assumption that goes on in Columbus that we have the perfect ecosystem of economic activity, that you can do all your shopping here and everything like that,” Krebs said.

He added, when he served as Preble County Commissioner he “quickly learned how important the county’s ‘piggyback’ sales tax is to funding county government and how state financial assistance from the local government fund and other sources were critical components of county finance.”

According to Krebs, virtually every county’s greatest source of revenue for the county general fund is the sales tax. While he was serving as an executive at his first research group, the group developed an analysis of the abilities of counties to generate enough sales tax from local economic activities. He found that many counties now lack the economic capacity to adequately provide a full range of mandated services.

He focused on Preble County with a simple question: how many people who live here shop and eat exclusively in Preble County? How often do residents go to Dayton, Richmond, Hamilton, or Cincinnati for their nights out?

“It hit me, what we need to do is like the education equalization fund. Basically, what you see here is an equalization formula. It looks and smells just like the equalization formula for school foundation. If everyone who lived in Preble County also shopped there they would receive 100 percent of the expected revenue. If their citizens shop elsewhere, the number goes down. If the county is fortunate enough to have an outlet mall built, the number goes up,” he said.

“The problem occurs for counties like us, where we have not collected enough sales tax in ages. The question here is, what do we do? The way this is set us is we focus on the three big problems you have here. One, keeping the lights on; two, the drug problem; three, economic development and workforce development. You can use the equalization funds for any of these three categories, but you can’t use more than half of it for any one of those.”

His proposal is to create an equalization fund for counties, that sets aside a pool of state money to bring to these counties up to an average or a value of $1.00. He used data from 2016 to compile a list by 0.5 pt. sales tax rate. This proposal is structured so that all counties are eligible, not just smaller rural counties.

The list shows Darke County at 0.724 sales and use tax ration, and the County Equity Fund allocation is $1,640,845. Montgomery County is listed at 0.984 for $1,328,421.

Preble County is listed at 0.598 sales and use tax ratio with a County Equity Fund allocation of $1,569,932.

He said, “This is not Robin Hood; we are not proposing to reduce the piggyback sales tax revenue from the rich counties and give to the poor. This is also not county welfare; it is meant to help them get back up on their feet.”

The funds for this program would rely on the continuation of operations of the pilot Healthier Buckeye Program. Krebs added, “That effort has just wound down; 21 pilot programs around the state are using $11.5 million to reduce the able-bodied welfare burden and get those citizens into the workforce. If we can reduce able bodied welfare costs by two percent it results in $350 million in savings.”

By Kelsey Kimbler

Reach Kelsey Kimbler at 937-683-4061 or on Twitter @KKimbler_RH

Reach Kelsey Kimbler at 937-683-4061 or on Twitter @KKimbler_RH