By Randy Tucker
The Cincinnati Enquirer

Where will it end?

That was beauty salon owner Debbie Celek's response to Gov. Bob Taft's proposal to extend the state sales tax to some business and entertainment services, including such things as manicures and spa treatments.

"The state is already taxing me to death on the products I sell," Celek said Thursday as she welcomed her customers at Paragon Salons in downtown Cincinnati. "What's next? Are they going to start taxing doctor's visits?"

Celek was among a number of Greater Cincinnati consumers and merchants who were quick to express resentment Thursday upon learning of the tax proposal, which they considered particularly odious.

"It's easy for the governor and other politicians to propose a tax on dry cleaning because they probably get a dry-cleaning allowance," Dennis McAllester of College Hill said as he picked up his order from Magic Cleaners downtown. "It's the common man who wants to dress sharp at work but doesn't make a mint who will be hurt most. Dry cleaning is already expensive enough."

Under Taft's proposal, the state's 5 percent sales tax on consumer goods would be expanded to include such things as personal care services, dry cleaning and landscaping. The sales tax would also be extended to include entertainment and recreation expenditures, such as tickets for movies, sporting events and concerts.

Charging the 5 percent sales tax on personal services would raise $1.7 million in the first year of enactment, and $2.5 million in the second. The tax on entertainment and recreation would add $47.6 million to the state's coffers in the first year, and $54.2 million in the second.

But no matter how it benefits the state, it still burns many consumers who feel like a tax on personal services and entertainment is paramount to an invasion of privacy.

"It just seems like they're taxing services to make up for tax cuts everywhere else," said Joyce Deupree of Colerain Township, who was having her nails manicured at the Saks Fifth Avenue beauty salon downtown. "It's not so much the money that bothers me, it's the principle of the thing."

Despite the predictable backlash to proposed new taxes, Taft's plan makes sense, according to at least one expert.

The proposal "is not just about generating revenue, it's about generating revenue that's going to continue to grow at a good pace going forward," said Frank Badillo, vice president and senior retail economist at Columbus-based Retail Forward Inc., a retail management and consulting firm.

Badillo said extending the sales tax to services and entertainment would be a smart move because consumers continue to spend a larger proportion of their incomes on services rather than taxable retail items.

"The state's revenue hasn't kept up with the overall growth of expenses because it is taxing things that are growing slowly," Badillo said. "By taxing services, it would help to ensure that state revenue would continue to grow as quickly as costs."

E-mail rtucker@enquirer.com