News Release: HB 5 Continues Assault on Local Services, Pushes Total Cut to Communities to $495 Million a Year

For Immediate Release: November 20, 2014
Contact: Keary McCarthy, (614) 425-9163

HB 5 Continues Assault on Local Services, Pushes Total Cut to Communities to $495 Million a Year
IO report shows cumulative impact of HB 5 and previous 4 years of cuts to communities

COLUMBUS – Innovation Ohio released a report today that shows the cumulative financial impact of House Bill 5, along with previous cuts to local communities passed in the last two state operating budgets.  The report estimates that passage of House Bill 5 alone would cost communities $82 million a year, and when combined with previous cuts, the total impact on local services approaches nearly half a billion dollars annually.

“Our state is only as strong as our schools and local communities,” said Innovation Ohio President Keary McCarthy. “Taken in context with the last four years of significant funding cuts to local communities, passage of House Bill 5 could have serious impacts on services that keep our streets safe and our communities strong.”

Over the last four years, the state has cut an estimated $413 million each year for Ohio’s cities and villages through reductions in Local Government Funding, reimbursement losses for TPP and KWH tax, and the elimination of the estate tax.  Combined with an estimated $82 million in annual revenue loss from House Bill 5, the total impact on municipal services is estimated at $495 annually or nearly $1 billion of a two-year budgetary period.

“Republican and Democratic leaders in the Dayton region stand united in our belief that continued cuts to local communities have seriously harmed our ability to provide essential services such as police and fire protection, road paving and infrastructure repair,” said Dayton Mayor Nan Whaley. “Loss of these services impact the quality of life for our constituents and the ability of our small businesses to thrive.”

The report shows the estimated impact of House Bill 5 for 187 municipalities that have provided impact assessments, along with the specific funding cuts from the estate tax elimination, cuts to the Local Government Fund, and TPP and KWH reimbursement losses. The report also shows these cumulative estimated losses as a percentage share of the municipal budget. For the cities of Dayton and Cincinnati, these cumulative losses represent nearly 10 percent of its overall budget.

“House bill 5 needs to be amended to stop cutting resources for local governments,” said Cincinnati Mayor John Cranley. “The death by a thousand cuts coming from Columbus must stop.”

For the cities that did not report estimated impacts from HB5, Innovation Ohio calculated the revenue impact per capita for the cities for which estimates are available to the population of the state’s remaining 429 communities that levy an income tax. Combined, we estimate the potential statewide impact of HB 5 on cities and villages that levy an income tax at over $82 million each year.

“The state legislature’s continued attempts to cut funding and hamstring communities is making it harder to keep our streets safe and our taxes low,” said Marion Mayor Scott Schertzer. “Passing House Bill 5 without making reasonable changes that would limit the financial impact for communities would be yet another hit that everyday Ohioans will undoubtedly feel.”

Read the report: “House Bill 5: Impact Analysis