Blame game: State and counties point fingers over who is to blame for revenue woes

Ohio Statehouse Newsroom

For many of us, when we pay taxes, we expect the money is used on things we value like our safety; infrastructure like roads and bridges; and on services for our neighbors who need it but can’t afford it.

Counties and eventually the cities and towns we live in have been relying on revenue sharing with the state since the 1930’s.

Now that money from the state is not trickling down as it once did, sales taxes have risen and counties say they are frustrated.

Back in the 1930’s the State and counties came to an agreement, but counties say over the last two decades changes to that agreement have left them scrambling to pay for mandated services.

Recently, Governor Kasich announced the state increased its rainy day fund to 2.7 billion dollars.

The fund is there to protect the state and local governments if there is a sudden economic downturn so that the bills can all be paid for a month. The fund has grown for the past 7 years and is nearing its statutory cap.

Kasich had this to say about local governments wanting to pull money from it.

“Outside of the unremitting whining of local governments which run surpluses and give pay raises and don’t manage their budgets too much of the time, we’ve been very successful in making sure that people who are really in a bind have not been taken advantage of,” said Kasich.

However, it is the amount of revenue sharing coming from the State overall the County Commissioners Association is most concerned about.

“What we do in 88 locations in the State of Ohio is deliver state-mandated services,” said Lake County Commissioner Daniel Troy. “We provide what we consider the basic components of the civilized society.”

Revenue sharing that was helping to fund those things has been cut in recent years, according to the Association.

According to the Association, counties have lost more than $350 million in total from the elimination of the tangible personal property tax reform from back in 2005; a freeze on the Local Government Fund, also in 2005, and their claim it was cut in half by the Kasich administration when they took over a few years later; and the loss of the Medicaid Managed Care Sales Tax due to the Federal Government no longer allowing it to be collected.

The Association says counties have been forced to rely heavily on sales taxes to pay for the State mandated services, and they are upset with lawmakers.

“Every time we turn around they’re looking to create exemptions in the state sales tax. This continual cutting of our funding must really stop,” said Shelby County Commissioner Julie Ehemann.

In counterpoint to the Associations claims, Kasich’s Office of Budget and Management (OBM) says more than 85 percent of Ohio’s General Revenue Fund budget dollars go directly to local governments and schools.

“The Local Government Fund is just one of several sources of revenue through which the state budget directly supports local governments and schools. In fact, the LGF represents only 2.3 percent of all state support going to Ohio communities. The LGF represents only seven-tenths of one percent of the total estimate revenues collected by local governments and schools,” according to John Charlton with the OBM.

They also point out that, since 2011, total revenue for local governments and schools has increased by more than $5.5 billion.

With the Kasich administration coming to an end, the Association has met with the gubernatorial Republican and Democrat candidates and claim both men seem open to finding a way to fix what the Association sees as a problem.

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