July 5, 2013
LIMA — The new state budget is a massive document, so Allen County Commissioner Jay Begg doesn’t have it all read quite yet.
But what he keeps finding — lost revenue and unfunded mandates — he doesn’t like.
The 2014-15 state budget does not restore major cuts made to local government funds. New casino tax revenue has taken away some of that sting for counties, but instead of being additional revenue, it’s more of a wash. Most cities, other than the four host cities with casinos, have experienced only the cuts in local government funding, along with other cuts, such as the elimination of the estate tax.
The new budget requires counties to create a lifetime dog license, Begg said, but provides no means to do so. It’s an example of an unfunded mandate, and it's a headache.
“In theory, it sounds really good. If you got the bugs worked out, maybe you’d say, 'Well, why didn’t we do this a long time ago?' In reality, it will cause us to expend more funds, and it will provide enforcement challenges,” said Begg, a Republican. “We have an issue just getting our dogs licensed, period. The county association tried to get it changed, and we were unsuccessful.”
The cuts have made local governments work in collaborative ways, Begg said, adding that he believes that is a positive. However, local government fund cuts have hurt in much larger ways, Begg said. The county is in negotiations currently with a sheriff’s union and has no money for raises.
“We haven’t given raises for too long, even though the cost of living has skyrocketed and is increasing every day,” Begg said. “We lose entry-level people who can find a better job, and we lose top-level people and their expertise because someone else can offer them more income. That’s a problem. If this is the new normal, are we going to be able to get good people and keep them working for us? The county employs 1,100 people.”
Officials in the Republican-led Legislature and Gov. John Kasich, also a Republican, hailed the $62 billion budget’s income tax cut, new funding formula for schools and universities and school voucher expansion. The 2014-15 budget shows a small increase in the Local Government Fund over the previous budget. However, a report from liberal think-tank Policy Matters Ohio shows an overall picture, including new casino revenue, and all cuts show a loss of $1.4 billion for local governments in Kasich’s two budgets.
“This budget is about opportunity for Ohioans,” said Senate President Keith Faber, R-Celina, told the Columbus Dispatch. "Almost all of the new spending in this budget falls into Medicaid and K-12 education.”
The budget phases in a tax plan that will result in a nearly $3 billion cut in the next three years, starting with an 8.5 percent cut this year. The budget also includes an income tax cut that results in a 50 percent income tax deduction on the first $250,000 of income for business owners.
Rep. Matt Huffman, R-Lima, who is second in leadership in the Ohio House, said the income tax is punitive, and a state should make it as small as possible to spur growth.
The cuts amount to reneging on a promise to Ohio residents, Lima Mayor David Berger said. Decades ago, to sell the idea of any income tax at all, the state pledged a specific percentage set aside for local communities and local government needs. It’s the reason there is a Local Government Fund at all.
Republicans in Columbus have shredded the fund, and the promise, to pay for a tax cut for the wealthy, Berger said.
“They’re deliberately starving local governments and public services at the local level. It’s unconscionable,” Berger said. “They’re trying to establish it as the new normal, and I don’t believe that any local government official will accept that. Mr. Huffman and Mr. Faber are in leadership roles on this, and they have repudiated a decades-old relationship between the state and local governments, and that is having consequences of reducing the number of people available to provide local services and the quality of those services.”