If projections by the state hold up, area towns will realize an increase this year in their allocations of local government funds – but not by much.
Probably not enough to satisfy the Lake Township trustees, who earlier this month approved a resolution asking for State Representative Tim Brown and State Senator Randy Gardner to push for restoring cuts to the funds, which are derived as a percentage from the state’s general revenues, including the sales and incomes taxes and others.
After seeing the township’s road budget hit by overtime costs for snow removal and road repairs, the trustees approved the resolution that says local government funds to the township have been cut by 30 percent “…an amount which now could be used for infrastructure repairs.”
The resolution notes the Ohio Budget Stabilization Fund – also known as the rainy day fund – is more than $1.4 billion.
According to estimates by the Ohio Department of Taxation, the township will receive about $88,972 in 2014 in local government funds. That is about $8,000 more than it received last year but still less than the $116,340 received in 2012. The Village of Pemberville, for example, will receive $11,737 this year – about $1,054 more than in 2013 but $3,610 less than in 2012.
Rep. Brown and Sen. Gardner said last week the unusually harsh winter does justify additional assistance to local communities.
“I agree that some state funds should be provided to local governments specifically to help with the unusual costs associated with this historic winter,” Gardner said. “Especially when there are safety issues at stake.”
Brown also said he’d like to see funding restored to local entities “given how impactful this winter was to local budgets” and “some additional dollars are being directed to various community projects this spring through the state capital (improvement) bill.”
The lawmakers said communities will realize another increase in funding for infrastructure projects if a ballot issue on the May primary ballot is approved. State Issue 1 would increase annual funding from $150 million to $175 million to repair roads, bridges and other projects if it passes, Brown said.
Months before winter-related expenses set in, the directors of the Ohio Township Association, Ohio Municipal League, County Commissioners Association of Ohio and Ohio Parks & Recreation Association were pushing for restoration of local government funding.
In a May 2013 letter to Sen. Bob Peterson, chairman of the newly-created finance subcommittee on general government and a member of the finance committee - when the legislature was putting the final touches on the operating budget for the fiscal year beginning last July - the directors wrote that local governments lost more than $1 billion during the previous biennium budget.
“Local governments had multiple revenue sources decreased or completely eliminated in the last budget and took a disproportionate share of cuts to fill the budget hole,” the letter says. “In addition to the 50 percent cut in LGF revenue, the General Assembly approved an accelerated phase-out of the tangible personal property tax and electric deregulation tax reimbursements.”
The letter also says municipalities and townships had received 80 percent of the revenue from Ohio’s estate tax before it was phased out by Jan. 1, 2013.
Sen. Gardner said the current state budget restores a balance of 5 percent to the rainy day fund, “…which by any measure is considered conservative fiscal management of state tax dollars.” (State law sets the maximum amount for the fund at 5 percent of the previous year’s general revenue collections.)
Rep Brown said residents and elected officials should recall the state’s dire financial situation a few years ago.
“It is important to remember we are only one budget cycle out of the mess that was handed Gov. Kasich and required that he and the legislature balance an estimated $8 billion shortfall,” he said.
Jim Lynch, a spokesman for the Office of Budget and Management, said his office is seeing a trend toward stronger budgets among local municipalities and townships.
“This positive trend is possible, in part, through Ohio’s growing economy, which has fueled near record sales tax and income tax revenues for many Ohio communities,” he wrote in an email, and referred to news reports of 30 towns, including several in Northwest Ohio, to realize growth in tax collections last year.
“Much of the consternation over the LGF reductions stems from the fund’s name, which implies that it’s a primary revenue source for local governments,” Lynch wrote. “In fact, the LGF represents a small percent of the total support local governments receive from the state budget and, for most of those governments, a significantly smaller part of their total revenue stream.”
As recently as 2010 there was 89 cents in the rainy day fund, according to the OBM.
For local fiscal officers like Vicki Schwamberger, however, the concern is more about the effect the past two months had on budgets.
It took Lake Township road crews 559 hours of overtime to clear snow and make related repairs in January and February alone, costing the township about $18,459, she said.