Life After Death Tax? 

The state’s repeal of estate taxes could strike a lethal blow to local communities

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Buying Time

Legislators, recognizing that the governor's budget was harder on local governments than expected, opted to postpone the impact: Originally slated to take effect immediately, the death tax repeal is now scheduled for two years down the road. Lawmakers clearly hope an economic turnaround will ameliorate the damage.

"That is why we postponed the repeal of the estate tax to begin in January 2013," says Baker. "The way probate courts work, it would be another six to nine months before it would take effect. We wanted to be sure to give cities time to prepare for it."

"I think it was the right thing to do, since people had already started working on their budgets for next year," Westlake's Clough says of the postponement. "Next year, we're still going through the lag in the economic growth. I would say after 2013 would be the time to phase it out."

Euclid Mayor Bill Cervenik points out that his city, like most, has already tightened its belt in recent years.

"We've made tremendous cuts in personnel," he says. "If you take [estate tax revenue] from the city of Euclid, and you take away a million dollars in state funds, and we're losing about $460,000 from the [phased-out business tax] — you add those up, that's a lot of money. I submitted a budget to my city council that they approved for 2011 that was $700,000 less than our budget in 2008. That budget contained very few reductions in our safety forces. If these reductions are put into effect, I have nowhere to go but to reduce safety forces."

And he says the demand for services — all services — has increased.

"When I started as a councilperson in 1989, I never fielded a call for basic help: food, clothing, toys at Christmas for my child," he says. "Now it's a daily occurrence. One of the arguments about the estate tax is that it's chasing people out of Ohio. If all municipalities make cuts that ruin the quality of life in those communities, you're going to be chasing out a lot more people."

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