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03-17-05 Mercer County real estate fee might increase

By Sean Rice

  People selling property in Mercer County may have to pay an extra $2 per $1,000 on the sale price if county commissioners follow through with a plan to raise the real estate transfer fee.

  Currently $1 per $1,000 is charged on each non-exempt property transfer. The fee, which equals $100 per $100,000, was created by state law in the early 1970s. The fee brings in about $100,000 annually to the county's general fund.
  A group of local real estate agents were on hand at a public hearing Tuesday night to ask county leaders to rethink the proposal.
  The transfer fee is a permissive fee that county commissioners have the ability to increase under Ohio law. Commissioners can legally raise the fee from $1 to $4.
  Mercer County is one of seven counties in Ohio that still charge $1 per $1,000. A total of 41 counties charge the highest rate of $4 per $1,000.  Commissioners Jerry Laffin, Jim Zehringer and Bob Nuding, with county Auditor Mark Giesige, explained the county general fund has lost an average of $500,000 a year during the last four years because of the drop in interest rates.
  Also a combination of state reductions in fund reimbursements, reductions in local government funds and other "back-hand" cuts from the state have "made it more like $1 million a year in unrealized gains," Giesige said.
  In Gov. Bob Taft's proposed two-year budget, local government funds are cut 20 percent further, which would mean $191,640 less for the county general fund.
  A transfer fee increase from $1 to $3 per $1,000 sold would bring the county about $200,000 more per year.
  Giesige likened the transfer fee to a user fee, because the county does the service of processing the documents when a property is sold. Also, realtors and the public use the county's tax mapping program online to pull up aerial photos and descriptions of properties.
  The tax mapping information system in the auditor's office costs more than $400,000 per year to operate, Giesige said.
  Real estate agent Dave Homan said the county should work with the state to get rid of property transfers that are exempt from the transfer fee. He estimated as much as 50 percent of all property transactions are between family members and exempt from the fee.
  "They are using those services ... the work is all the same, it looks to me," Homan said.
  Homan said the county should do something else, rather "than penalize a person that's selling a piece of property."
  "We're trying to do the services for the people, that's why we need the funds," Laffin said, adding the county would have been in fine shape if the local sales tax issue was passed in 1995.
  "We're watching our pennies pretty close I think," commissioner Jim Zehringer said, after listing efforts by county leaders to cut nearly $1 million from the budget this year.
  Commissioners repeatedly stressed that actions by the state government have forced counties to seek more money from residents.
  Laffin said state lawmakers slyly stick local government fund reductions and other measures in with the massive state budget, which removes the chance of a referendum.
  "They take it from the counties and expect them to put it back on the people," Laffin said.


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