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Refund weighed for Bainbridge taxpayers
(by Joan Demirjian - October 08, 2008)
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Refund weighed for Bainbridge taxpayers
By JOAN DEMIRJIAN
Bainbridge Trustee Matthew Lynch said Monday that he wants to use a portion of the township's $6.5 million in estate taxes for tax relief to township taxpayers.
One possibility is a refund of some of the township's savings account by way of checks sent to the citizens, he said. Another possibility is a reduction of a township levy, thereby lowering taxes for residents, he said.
Existing tax levies could be reviewed to see if they could be reduced or eliminated and paid for a specified period from the savings account, Mr. Lynch said. It would not mean a reduction in funds to the township departments, he said.
Township Trustees are working on a five-year plan for use of the more than $6 million in funds now earning interest in special savings accounts. Most of the money is from the estate of the late industrialist Paul Frohring.
Mr. Lynch said that, when Bainbridge received the total of $15 million in Frohring estate taxes almost 10 years ago, Township Trustees at the time said tax relief to the residents was one of their goals. "The previous board failed to honor that commitment," he said.
If approved by the Geauga County prosecutor, one method of tax relief is to rebate the funds to taxpayers, Mr. Lynch said.
Trustee Linda White said, "If the federal government can send a $300 check, why can't the township?"
But she added, "We need a prosecutor's opinion first."
Mr. Lynch said they could set aside funds, such as $2 million, for the tax relief and send out checks one year and then possibly do it again. "We would set it aside, but we don't want to be locked in," he said.
"And we don't want to give rebates to someone who doesn't pay taxes," Ms. White said.
Trustee Jeffrey Markley said he would not be in favor of writing checks to residents. He would rather use the estate taxes to work on cutting township operating expenses, he said.
Ms. White said the fire, police and road departments have all been prudent in keeping costs down and stretching their money.
The goal should be to determine what the township's recurring and nonrecurring costs are and keep the general fund "as tight as we can, so it's not going into the red," Mr. Markley said.
Reducing operating expenses would be "better than a $300 check," he said.
One way to reduce recurring expenses is to look at maintenance of township buildings, Mr. Markley said. Lower operating and heating costs would be better in the long run, "so we don't put the costs on the residents," he said.
However, Mr. Lynch said, it has always been his goal to cut operating expenses, but a tax reduction is also possible. The Frohring estate taxes are "the taxpayers' money, and, for 10 years, trustees have said they would consider tax relief," he said, but there has been no tax reduction.
If trustees want to help residents with taxes, Mr. Lynch said, "we have to do it now, with a check or tax reduction on a levy."
Resident Ted Seliga said a rebate is a short-term satisfaction to the residents, but it will be a long-term dissatisfaction when they pay more taxes, in levies. "So why rebate?" he said.
Mr. Lynch said, "This money doesn't belong to the township. It belongs to the citizens." He added, "The problem is that government too often thinks it is entitled to the citizens' money. We only have a right to the funds the citizens are willing to give us."
However, Mr. Markley said the $15 million of Frohring estate taxes "didn't come out of our pockets. It came out of this gentleman's pocket. If we give it back, it's short term. Or we can provide good services and reduce the township's operating expenses. That would be a true gift of the money. If we can reduce costs, then we are doing our job."
Ms. White said the township could help residents by meeting the needs of the township departments.
Mr. Markley agreed, noting that the best use of the money would be projects that would most benefit residents. "If we can extend levies and reduce operating costs and pay for some of the township's wants, that is a good use," he said.
Mr. Lynch said a levy could be set aside for three years, paying it through the Frohring funds, "But I'd rather send everyone a check as a practical matter," he said.
The deadline for adjusting the township's tax collection and to reduce taxes for 2009 is Nov. 15, Mr. Lynch said. "We have to make a decision." To make big improvements, big changes must be made, he said. "Rebates to the taxpayer is a big improvement, and we have the money," he said.
"It's time to address the issue of tax relief. We have the money. We just need the willpower."
He said he would contact the prosecutor's office to determine what method can best be used for tax relief.
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