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January 6th, 2014 By German Lopez | News | Posted In: News, City Council, Budget, Governor, State Legislature

State Cuts Contribute to Local Budget Gap

Republican state officials slashed local government funding in previous budgets

city hallCity Hall - Photo: Jesse Fox

Cincinnati might not be facing an operating budget gap in 2015 if it were not for Republican-approved cuts to state aid for local governments.

Following cuts approved by Republican Gov. John Kasich and the Republican-controlled Ohio legislature, Cincinnati officials estimate the city is getting $26 million less in state funding in 2015 than the city did in 2010.

At the same time, the city is facing a $21 million operating budget gap in 2015.

The reduction in state aid helps explain why the local budget gap remains after several years of council-approved spending cuts and tax hikes.

“It sounds like the city is doing a good job,” said Democratic Councilman Chris Seelbach at Monday’s Budget and Finance Committee meeting. “Where we’re seeing these obstacles is these outside sources.”

Independent Councilman Christopher Smitherman countered that the cuts to the local government fund and the elimination of the estate tax, both of which drove the reduction in state aid, have been known since 2011 and 2012.

“Public policy makers have, in my opinion, continued to make decisions as if those public policy decisions from the governor’s chair or from the state … weren’t in play,” Smitherman said.

“This is not new information.”

Republican Councilman Charlie Winburn agreed. He said it’s time to stop blaming the governor for the city’s problems and face the reality of reduced revenues.

Still, Winburn acknowledged he would be willing to meet with state officials to bring more revenue back to Cincinnati.

“Maybe Republicans will be willing to meet with a Republican like me and see if we can bring some money back to Cincinnati,” Winburn said.

Republicans at the state level passed cuts to the local government fund as a way to balance the 2012-2013 budget, which faced a projected gap of nearly $8 billion in 2011. They then approved the elimination of the estate tax — often labeled the “death tax” by opponents — in 2012.

But with Ohio’s economy slowly recovering from the Great Recession, the state budget looks to be in much better shape. The 2012-2013 budget ended with a $2 billion surplus because of higher-than-expected revenues.

Ohio Democrats point to the surplus as evidence the Republican-controlled state government could undo the $1 billion in cuts to local government funding. They argue the cuts have hurt local governments and forced cities to slash basic services, including public safety.

 
 
 
 
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