LGF cutbacks yield fewer services
Ohio’s Local Government Fund was created by the General Assembly in 1934 and a couple of others were created in the mid to late 1980’s to help provide additional support to local government and to local library districts. In a nutshell, Ohio’s local governments consist of counties, townships, cities and villages for current operating expenses, and they may use this money for any lawful expenditures for the government.
For example, in Belmont and surrounding counties, the funds are used directly to pay for essential public safety, some human service programs and the day to day operations of all local governments.
This does not include expenditures for public improvements having a greater than five year life expectancy or for the payments of interest for the retirement of bonds and notes.
Beyond that, Ohio’s local governments flourish or flounder depending upon how much money they get from the state of Ohio. In my many years of working in or studying local government issues, I have not seen the severity of how local government funding cuts have and will affect where we all live and I anticipate drastic service cuts if more monies are not appropriated in the next biennium budget. There is no local government in eastern Ohio that has not been negatively affected by the cuts from these funds and all of us will soon see more drastic effects of the same should changes not soon be made. There seems to be total disconnect between the state and its political subdivisions when it comes to fiscal decisions and partnerships that will benefit all Ohioans.
As a result of the same, all of us must get used to darkened streets, thinning police and fire ranks amongst other services that are expected from Ohio’s residents. The recent license plate fee hike proposal by Belmont County Engineer Fred Bennett is a direct result of the continued funding cuts his office, along with other county offices, continue to receive from Columbus.
Despite what seems to be an economic upswing, a $2 billion surplus, an increase in the sales tax base and new revenues from casino gambling, Ohio’s local governments seemingly are in for an additional cuts from the proposed Kasich 2014-2015 budget.
Additionally, Ohio’s estate tax, which historically has been a major source of funding for local governments, has been dwindling for years. Effective Jan. 1, 2013, there is no longer an Ohio estate tax on residents’ estates over a certain amount of assets or net worth and local governments have no new way to offset those former revenues.
The state’s current 2012-2013 budget cut hundreds of millions of dollars from the local government funds while also taking at least two-thirds of tax reimbursements paid into the state’s and local government coffers.
As our local elected officials continue to work with their local economic development agencies, it is very apparent that developers continue to look to local governments to provide needed services for infrastructure(roads, bridges and water and sewer lines), law enforcement, fire protection, emergency medical services, parks, libraries and other services when they make decisions about locating their business, or more importantly, even staying where they currently operate.
If the Governor’s current budget would be approved today, Ohio’s local governments would receive $363,600,000. As a comparison, just three years ago, the figure was around $694, 441, 455 or a bit more than half of what is being proposed. From the time the governor took office 3 years ago, he promoted streamlining services through collaboration and consolidation but even that has its limits. Forced efficiencies are fine in many respects but Ohio’s local governments are now faced with a very difficult ability to simply provide good quality services to their residents.
It seems as though the state is balancing its budget on the backs of local governments and it may be time to rethink this funding process, dramatically changed with House Bill 66, about five years or so ago. The County Commissioners Association of Ohio (CCAO) has the partial restoration of Local Government Funds as its first of many priorities for the new biennium budget process. The CCAO, along with the Ohio Township Association and Ohio Municipal League, will do an excellent job promoting Ohio’s local governments but it remains to be seen how the Governor and the General Assembly may compromise on a fair funding formula. Also, State Senator Lou Gentile has offered an amendment to the state budget bill, that, if passed , would directly help local governments by increasing their monies by 2.52 percent over the biennium.
As has been discussed in prior columns, in order to grow jobs in Ohio, the private sector(the true job creators) must continue to work directly with the public sector. In order to effectuate the same, local governments, as the state’s largest partner, must have the proper state funding to help provide good roads, bridges, schools and public safety services, all of which combined form strong and economically-vibrant communities.
While no resident wants to pay more fees or taxes, we too need to understand that our government tax dollars only go so far and those dollars are drastically less than in years’ past. Until there is a mutually-agreed upon plan between the state and its local governments, Ohio will see less local services for the monies we send to Columbus.