Local Government Fund Coalition Calls for Legislators to Restore Funding, Reduce Burden Community Budgets Carry for Budget Balancing

COLUMBUS, Ohio, April 29, 2011 /PRNewswire/ -- Leaders of Ohio's local governments say the substitute version of the state budget bill released Thursday (HB 153) cutting $8 billion, or 17 percent, from the budget continues shifting unfair and disproportionate cuts to local communities statewide. The proposed 50 percent reduction in the Local Government Fund, elimination of the estate tax on Jan. 1, 2013, and the phase out of the Tangible Personal Property tax and utility tax sharing until July 1, 2013, when the phase out would be suspended, impose unmanageable cuts on local governments.

Community leaders say the original budget of Gov. John Kasich and Thursday's revision just shift the burden to local government entities to find new revenue sources or drastically cut local safety and human services and parks programs. The series of deep cuts in HB 153 could total nearly $2 billion for local governments.

"We understand that all Ohioans are expected to share in the effort to rebuild the state budget," said Matthew DeTemple, executive director of the Ohio Township Association and member of the Local Government Fund Coalition. "However, with the budget gap being about $8 billion or 17 percent of the total state budget, asking local governments to shoulder a 50 percent reduction in the LGF, along with the reductions in the TPP, estate tax and utility tax revenue just moves this fiscal crisis from Columbus to every county, township, village and city throughout the state." 

HB 153 suspends the TPP and utility tax phase outs after two years, but by that point 80 of the 88 counties the state will have already exhausted any TPP revenue coming through the county general fund and other levies line item in the state budget, and 84 counties will no longer be receiving utility tax income through the same fund. Additionally, nearly 90 percent of all municipalities will no longer be receiving revenue from the two taxes when the phase out suspends.

The Local Government Fund Coalition (www.everyohioan.com), made up of leaders of municipalities, townships, park districts and Ohio's 88 counties, calls on legislators to reduce the proposed cut Local Government Fund to a proportional reduction more in line with the state's 17 percent deficit and to decrease the burden on already stretched local budgets. Local Government Fund dollars pay for a range of vital community services from police, fire and ambulances, to parks and recreation to public health clinics, homeland security and natural disaster response.  

Gov. John Kasich's proposed budget reduces the LGF from $665 million in 2011 to $339 in state fiscal year 2013. The LGF would be cut by 20 percent in 2012 to $526 million. Additionally, Gov. Kasich's original budget shifted 2 percent of pension contributions back to employees, offering one immediate savings option for communities. However, that savings provision was eliminated in the House version.

Ohio's largest city and the state's smallest county have both said this week that the proposed cuts will devastate local services.

In testimony at the statehouse today, Vinton County Auditor Cindy Owings said the proposed cuts in state revenue sharing mean residents of Ohio's smallest county will be served only by elected officials. There will be no safety forces or other county service employees. For the criminal justice system for example, there will be a sheriff and a judge, only. (See Auditor Owings full testimony at www.everyohioan.com)

Cleveland Mayor Frank Jackson on Wednesday said state budget slashing reverses his city's five years of work to have a sound fiscal plan in place. He shared with the General Assembly the immediate impact of the proposed $35.7 million of state revenue reductions  – 350 to 400 city jobs will be eliminated in May. (See Mayor Jackson's fiscal presentation to the General Assembly at www.everyohioan.com)

The Local Government Fund Coalition acknowledges that HB 153 includes $50 million each year of the budget in Commercial Activity Tax revenue intended to assist local governments to develop shared services projects which can save money in the long run. The plea for a reduction in the magnitude of the immediate cuts to the LGF to maintain basic services has apparently fallen on deaf ears.  

The Coalition will be meeting with state legislators throughout the balance of the budgeting process to press the case for reducing the excessive and disproportionate cuts to the LGF to a sustainable, fair level. The Coalition was created to educate Ohioans and state leaders about the local services provided by the LGF, the one state line item that touches every citizen of the state.

"While the proposed budget has eliminated some state mandates and provides some additional needed tools to manage local government budgets, these initiatives do not come close to providing the cost savings needed to salvage the red ink in local budgets that will be caused by the massive state cuts proposed.  The net result of this budget is that the state is simply pushing its budget problem onto the backs of local governments and local taxpayers," said Susan Cave, executive director of the Ohio Municipal League and Local Government Fund Coalition member.

Members of the Local Government Fund Coalition include the following statewide organizations: County Commissioners Association of Ohio, Ohio Association of Regional Councils, Ohio Municipal League, Ohio Parks and Recreation Association and the Ohio Township Association.

The effort is supported by: Coalition of Large Ohio urban Townships, Cuyahoga Mayors' and Managers' Association, Greater Dayton Mayors' and Managers' Association, Hamilton County Municipal League, Licking County Planning Commission, Mid-Ohio Regional Planning Commission and Northeast Ohio Mayors' and Managers' Association.

SOURCE Local Government Fund Coalition