LIMA — Despite losses in local government funding, Lima entities were already braced for the impact and had already offset the losses.
A report released by Policy Matters Ohio on Tuesday said that local governments had lost $1 billion since 2010. The losses have come primarily to the six-year phase out of tangible personal property tax that began in 2011, the elimination of the estate tax, and drastic reductions in local government funding.
The city of Lima has seen state revenue decrease from $3.9 million in 2010 to $2.3 million in 2017, a 41 percent decrease. Allen County saw a less dramatic decrease from $8.7 million to $8.2 million and health and human services funding decreased drastically from $1.2 million to $367,000, a 70 percent decrease.
Lima Finance Director Steve Cleaves said he made a couple of trips to Columbus to testify on the potential impact the reductions would make. However, when it became clear of what was going to happen, city officials did what needed to be done.
“We saw it coming and we were concerned about it,” Cleaves said. “We were in the middle of a recession.”
Cleaves said the cuts have been offset by several actions, including attrition, a “soft freeze” in which only required positions were sometimes filled, the use of contracted manpower through “temporary service,” and increasing workloads of some positions.
“We still have a few areas short on manpower, but it isn’t too bad,” Cleaves said. “We still try to use contracted services when possible, but there is a little more resistance now because we have about a 30 percent reserve in our cash reserves.
State funds at the county level were largely offset by funds received from casino revenues. While the county lost $1.4 million in TPP tax reimbursements between 2010 and 2017, it received $1.3 million of that back in casino revenue. However, it still had a 42 percent loss in local government funds to contend with.
“It made our job a little harder,” said county Commissioner Jay Begg. “It became imperative that we do our best to find efficient ways to use taxpayer money.”
Begg said the commissioners have also focused on other areas, such as keeping in contact with state legislators on the importance of the local government funds and trying to eliminate unfunded mandates. Begg said the commissioners also have been “very conservative about adding anything to our budget.”
Health and human services saw the biggest decrease percentage-wise at 70 percent. This included 60 percent in children services, 63 percent for the Johnny Appleseed Metro Park District and 62 percent for senior citizen spending. The Mental Health and Recovery Services Board of Allen, Auglaize and Hardin Counties lost all $261,000 that it had left in the phase-out, but had prepared for the loss and was actually able to add services.
“We saw the writing on the wall and we planned for that loss,” Mental Health Recovery Services Executive Director Michael Schoenhofer said.
Schoenhofer said a new 1 mill, five-year property tax levy was approved by voters in 2014, followed up by a renewal of another 0.5 mill levy in 2015. The levies generate $3.2 million and $1.6 million. He added that the expansion of Medicaid two years ago also helped out.
“That made a huge difference for us, especially in covering people with addictions,” Schoenhofer said. “We generated another $800,000 with the expansion. We were able to use that money and apply it elsewhere where it was needed.”
