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July 24th, 2013 By German Lopez | News | Posted In: News, Budget

State Budget Cuts Local Government Funding

Policy Matters Ohio finds cities, counties will receive $720 million less from state

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The recently passed state budget means cities and counties will get even less money from the state, according to a new report from progressive think tank Policy Matters Ohio.

The report looks at “three blows” of cuts to local governments: less direct aid, no money from a now-repealed estate tax and the beginning of the end of a state subsidy that supported local property taxes. The cuts add up to at least $720 million less over the next two years than cities and counties got in the past two years, the report finds.

It’s even less money when looking further back in Ohio’s history — specifically before Republican Gov. John Kasich took office.

“Local governments will see $1.5 billion less in tax revenues and state aid compared with” fiscal years 2010 and 2011, said Wendy Patton, the report’s author, in a statement.

“Fiscal crisis will continue in many communities.”

Kasich and Republican legislators slashed local government funding in 2011 to help fix an $8 billion budget hole. But the latest state budget, which Kasich signed into law in June, was awash in extra revenues because of Ohio’s economic recovery — so much so that legislators passed $2.7 billion in tax cuts.

The Republican-controlled state government repealed the estate tax in the last budget, but some Democrats and local governments were hopeful at least some of the lost money could be restored this year.

Casino revenue was supposed to curtail some of the cuts, but Policy Matters concludes it’s not enough. Casino revenue has also consistently come under expectations: The state government in 2009 estimated Ohio’s casinos would take in $1.9 billion a year, but that projection was changed in February to roughly $1 billion a year.

For Cincinnati, the previous round of budget cuts cost the city more than $22 million in revenues — nearly two-thirds of the budget gap the city faced for fiscal year 2014. Although the city managed to avoid laying off cops and firefighters as a result, it still had to slash other city services and raise property taxes.

Some city and county officials are trying to persuade the state government to undo the cuts. In March, Cincinnati Councilman P.G. Sittenfeld gathered officials around the state to launch ProtectMyOhio.com, which lets citizens write directly to the state government about the cuts.

 
 
 
 
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