A survey of more than 20 localities by the Dayton Daily News found they expect to lose more than $28 million in state aid this year compared to what they received in 2009 because of cuts in funding and the phasing out of three taxes.
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- The tangible personal property tax can trace it roots back to 1846 when the state chose to tax all property. In 1931, the legislature limited the tax to machinery, inventory, furniture, fixtures and other equipment used to conduct business. In 2005, the legislature decided to phase out the tax over five years. At the time, only 13 states still had such a tax. The tax brought in $1.35 billion in 2006, the majority of which went to school districts with the still substantial remainder going to localities.
- The estate tax dates back to 1893 when the legislature enacted an inheritance tax that was paid those who inherited. In 1968, the legislature replaced the inheritance tax with the estate tax, which is paid by the estate. The tax applied only to those estates with a net taxable value more than $338,333. Those estates were taxed at 6 percent. Estates of net taxable value of more than $500,000 were taxed a 7 percent rate. Last year, the legislature voted to eliminate the tax on Jan. 1. Many estates from those who died in 2012 still are in probate and the localities are receiving the taxes from those estates this year as they clear probate.
- The utility consumption tax was created in 2001 to help offset some losses to localities from some tangible personal property tax exemptions. Throughout the years, the legislature has tinkered with the distribution formula so that more and more of the money went into the state general fund. According to the Department of Taxation, in 2009 $136 million went to the state general fund and $63.2 million went to local governments. By 2012 $294.8 million went back to the state and only $16.1 million went to the localities. Several of the localities surveyed by the DDN included the utility consumption tax in their income tax receipts and did not produce figures for those tax receipts.