By Dennis Hetzel, Executive Director
It goes without saying that the proposal to tax advertising in Ohio is a significant concern. Advertisers simply won’t spend as much, and won’t get as much value for their dollars, with a sales tax that will be 6 percent of more if local taxes are included.
It also is a long road to June, and we will be working hard on our own and forming coalitions with other groups to make our voice heard. That process already has begun.
Nor is that the only legislative challenge we face. Because of that, Board President David Dix reported to the members last week that the Board of Trustees has authorized engagement of a government relations firm in Columbus to assist ONA in its lobbying efforts. We hope to select a firm and make an announcement shortly. Existing ONA resources will be used to pay the firm, though we will develop a long-term strategy to create a “government affairs defense fund” of some type.
Our research showed that we are in the minority of states and the only state among the 10 largest in which the executive director of the state newspaper association does not have support from a staff lobbyist, a government relations firm or both. This, coupled with the urgency of the challenges facing our industry, motivated the board’s decision.
The advertising tax is part of sweeping budgetary language that Gov. Kasich has proposed to not only sales taxes but also the state income tax, school funding, oil and gas severance taxes and Medicaid funding. This is a huge, complicated package. The only guarantee is that what emerges from the Legislature this spring won’t be what was introduced.
It also is important to note that the existing exemption that newspapers receive on circulation sales, both subscription and single copy, has been retained in the budget proposal.
The next step in the budget process regarding the sales tax expansion will be hearings in the House Ways and Means Committee. Dates have not been set.
At the end of this article, you will find links to some of the editorials and articles written by ONA members about the budget proposal. I also urge you to read this excellent analysis done by the Vorys law firm in Columbus of the potential impact of the sales-tax expansion on businesses of all types in Ohio. Individual businesses will have to weigh what appears to be a significant increase in expenses from expanded taxation and administrative burdens versus possible benefits from cuts to the state income tax, and tax breaks that will benefit some small businesses.
Our first Legislative Watch List for 2013, available to ONA members, now has been posted to our website. Click here to view.
Here were my comments to members on a number of legislative areas during our annual meeting:
“As you all know, we face some real threats legislatively. Public notice requirements remain a target of death by a thousand cuts, particularly by local government groups. I should add that for all the criticism the Kasich Administration gets, they have been honest brokers with us on public notices and resisted efforts from state agencies to move notices from newspapers.
“What is scary at this moment is the number of what I call ‘franchise issues’ in our faces.
“Franchise issues are ones that have the potential to truly damage us. That certainly describes the Postal Service’s sweetheart deal with Valassis, and the loss of Saturday mail delivery for many of our members. And it absolutely describes the proposal to tax advertising – and not only to tax it, but to do so in a way that is unfair and damaging. Beyond our own efforts, you can expect to see a coalition that will include our colleagues in broadcasting, cable television, outdoor advertising and the ad-agency world mobilizing emerging soon. The governor’s budget that includes this proposal was just released, and it is more than 4,000 pages, so needless to say we still have a lot of digesting to do to understand what is in there.
“Meanwhile, there is similar turmoil on the public records front. The Internet, as it does everything it touches, creates both problems and opportunities. The sheer volume of public record content is partially why there is so much fresh talk about things such as search fees, “convenience fees” for accessing records on the Internet and even charges for printing records with your own ink and printer. Adding to this are growing exceptions. We are up to exception “cc” in state law with the latest addition, which relates to JobsOhio.
“More exceptions also mean more things to redact, more denials and more hassle. There are groups such as the opposition political party at the state level and, locally, some Tea Party-type groups that have figured out they can use public records as a harassment tool, though it is important to remember that even harassment can unearth important information. The other key factor in the constant battles we face to narrow public access involves financial pressures. As local governmental bodies in particular hunt for every nickel, public records tend to be seen as either an expensive hassle or something that can be monetized into profit centers.
“These are not good things for citizen and journalist access. I don’t have the answers to this yet. I sense we need to take the offense for some type of comprehensive measure, because these issues aren’t going away. I’m also encouraged by a growing interest in a broad study of how well Ohio laws square with the Internet Age. The University of Akron Law School will be using a Knight Foundation grant to study the topic this summer.”
The summary point is to stay active and stay tuned. As always, we stand ready to hear your concerns, help you make contact with legislators, join you in meetings and provide any talking points you need on our issues.
- “At Ohio Newspaper Association convention, Kasich explains decision to tax newspapers” (From The Toledo Blade)
- “Governor’s sales tax plan: A scary scenario for newspapers“ by Dennis Hetzel, executive director of the Ohio Newspaper Association
- “Tough week for newspapers” (Editorial by Keith Rathbun, Publisher, The Budget, Sugarcreek. The editorial is available for download and reprinting by ONA member newspapers.)
- “Vorys lays out business impact of sales tax changes“
- “State of the state” (Editorial from The Toledo Blade)
- “Kasich plan makes sense” (Editorial from The Columbus Dispatch)
- “Ohio’s proposed tax changes could mean higher tax bills for some” (Analysis by The Plain Dealer)