For many people, Ohio’s local government fund is just a largely ignored number in a gigantic document that Gov. John Kasich calls Ohio’s Jobs Budget 2.0.
But for local government leaders, it represents darkened streets, thinning police and fire ranks and a host of services they can no longer afford.
Officially the number is $363,600,000. That’s what the state will distribute to cities, villages and townships for the budget year starting in July if the budget is approved. That compares with $694,441,455 just three years ago — or a bit more than half. Year-to-year it is a 4.5 percent increase.
The governor and his budget director, Timothy S. Keen, have made it clear that no more is coming. The message is to be more efficient, cut services or raise taxes.
Even the state’s estimated $2 billion surplus didn’t change their minds. That might go to tax breaks.
“That’s kind of the last straw for our folks,” said Kent Scarrett, the Ohio Municipal League’s director of communications. “Our folks know, our municipal leaders know that our residents are plenty taxed already and that that well is pretty dry, and so every step is made to make administrative changes in holding off new hirings and other areas of cost saving.”
Local governments also are seeing the end of revenue from the discontinued estate tax.
Kasich has encouraged governments to streamline through collaboration and other efficiencies. A fact sheet distributed by the administration claims “1,000 local governments and schools have partnered to initiate 147 new shared services projects.” Those projects are said to have $84 million in potential savings.
“I know that it’s working locally,” said Randy Cole, Ohio Controlling Board member and Kasich’s point man promoting collaboration. “To name just a few examples — the Summit County Health Department consolidation and the aggressive pursuit of shared services by the cities of Tallmadge and Green are yielding significant benefits reached through collaboration”
But Scarrett said much of that tactic has been squeezed dry.
“Our efficiencies have been ramped up since 2008 and 2009,” he said. “[Previous cuts] forced efficiencies but there is a fine line between forcing efficiencies and delivering quality services and not getting into [police and fire] response times and not getting into areas that jeopardize the health and safety of citizens that live and work in these communities.”
He said many of his members in local governments are disappointed in state representatives who formerly worked in local government and know the problems they face.
“The only thing that we see quite honestly is that there seems to be a little bit of amnesia from Republican members when they come to the state level.”
Many local officials were fearful when the cuts were announced two years ago that they would prompt tax increases. The governor’s office, however, released figures showing there were fewer ballot tax issues in 2012 (1,176) than before the economic downturn in 2006 (1,299).
To find the local effects of the cuts, the Beacon Journal called area officials.
Fiscal Officer Randy Gonzalez, who also is the chairman of the Stark County Democratic Party, was blunt in his assessment of the state’s budgeting.
“The state balanced their budget on the backs of local governments and are pounding their chest now about the huge surpluses they have, while ours are being depleted,” he said by email.
“Our cuts were very deep,” he said. “…We also lost over a million a year in inheritance taxes (wealthiest 5% of population) along with major cuts to tangible personal property taxes. We failed a levy trying to replace some of them in May and we have another levy attempt on this November. Police are dipping into reserved balance accounts and fire will follow. This will result in more attempts at increased taxes for money we lost to, or because of the state.”
“We did a lot of things because at the same time the economy was down for a period of time,” said John Baranek, finance director. “We did a lot of it through attrition of employees who retired or left and we didn’t replace them.”
Asked what cuts residents might be able to see, he said “I think you notice it if you live in the neighborhood that needs road work, but if it’s a resident that has traveled throughout the county, they’re seeing that it’s occurring all over.”
He said state legislators are telling him the governor’s budget proposals are not “a done deal.”
A budget must be passed by July 1.
The city’s new downtown development has generated $1.3 million in new revenue, offsetting the $600,000 in local government fund and estate tax losses.
Still, Budget and Finance Director David Coffee said there are consequences.
“It’s caused us to continue all the typical austerity measures. Largely the impact has been borne on the back of our work force,” he said. “No wage increases in two years and a 1 percent increase this year. That has been the single largest item: cost containment on the payroll side.”
Akron has been hard hit by both the cuts to local government funds and the elimination of the estate tax. The city has been fortunate, though, to have seen a rebound in its income taxes and to have received federal grants that are being used to hire police officers and firefighters, said Finance Director Diane Miller-Dawson.
“The federal support we have been getting is the No. 1 reason we have been able to keep some of the staffing we have,” she said.
The city has used the bulk of its local government funds from the state for firefighter and police salaries.
Akron received two federal grants that allowed the city to retain 36 firefighters and hire 38 more and another federal grant to bring on 12 additional police officers. The city recently gave tests for new firefighter and police classes.
Fire Chief Robert Ross called the federal money a “godsend.”
“I believe we would not be hiring nearly this many had we not been awarded the grants,” he said.
Miller-Dawson is estimating Akron will get $1 million in estate taxes as the money comes in from the estates of people who died last year. The city had averaged about $4.2 million.
About $6.7 million in local government funds is expected this year, which is down about $5.7 million from two years ago. She expects the city’s income taxes to be up about 2.5 percent, which she said won’t be enough to cover the losses to state funding.
Miller-Dawson said the state promised casino revenue to make up for the losses in state funding that local government funds were getting, but the casino money hasn’t kept pace with the losses local governments have received. She said Akron received $2.7 million in casino funds in 2012, while the city was expected to get more than $3 million.
Beacon Journal staff writers Dave Scott, Paula Schleis, Kathy Antoniotti and Stephanie Warsmith contributed to this report.