Cities Say Budget Formula To Distribute Some Funds To Local Communities Doesn't Add Up

Feb 21, 2017

Gov. John Kasich’s proposed budget includes a change in the way a portion of the state’s local government fund is distributed to communities. But the leaders of some of Ohio’s biggest cities and a group that represents communities across the state are fuming over that formula.

This local government fund formula in Gov. John Kasich’s proposed budget is similar to Kasich’s school funding plan. It awards money from part of the fund based on capacity, a community’s ability to raise revenue from its residents. Budget director Tim Keen says the current formula depends on property values, which benefits wealthier communities. So this change, Keen told the House Finance Committee, is a good proposal that will help communities that need it the most. “It’s the state trying to focus resources to help those local entities deliver the basic services that their citizens expect rather than send these dollars out as we have to those who, frankly, don’t need as much assistance.”

But the upshot is that about a third of Ohio’s villages and townships, and more than a fifth of Ohio’s cities would lose money in the second year of the budget under this formula. A spokesman for the Ohio Municipal League calls it a means-testing exercise that pits communities against one another. Kent Scarrett says it seems based on whether the state thinks local officials have raised their taxes enough. “These funding changes have really crippled the ability of our communities to have the financial stability that they’re looking for and their residents and businesses are looking for.”

The biggest losses in dollar figures are all big cities – Cleveland, Cincinnati, Dayton, Columbus and Canton. Moraine near Dayton tops the biggest percentage losses list, but the four cities after that are all considered wealthy suburbs. The governor’s budget is still being heard in the House, which will soon release its version of the spending plan.