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· September 20, 2013

Reductions in local government funding leading to deep cuts in communities

statehouseIn the last three years state lawmakers made deep cuts to local communities to the tune of almost $2 billion by slashing the Local Government Fund and eliminating the estate tax . For years these funds went back to local governments and helped them fund all types of services ranging from road maintenance, hiring police and fire officials, to parks and recreation programs. A recent survey released by the Ohio Municipal League (OML) paints a stark picture of what cuts to these local government funds look like on the ground. The OML sent emails to over 1,300 employees at 249 cities and villages across the state with links to the survey.  The survey was comprised of 12 questions, 8 of which pertained to the municipality’s finances and recent budget decisions. Findings from the survey show that local governments of all sizes saw their bottom lines take a hit in recent years. Across all communities, the average general fund reduction was 5.08 percent. The communities with the smallest budgets took the largest hit to their operating budgets. There, local governments reported general funds reductions of 15 percent on average. When asked specifically what cuts local governments made because of funding cuts the answers are telling. The survey found that in response to cuts nearly 70 percent of municipalities reduced capital expenditures, 50 percent reduced service levels, and 40 percent raised fees. What this means is that when the state cut funding, local governments responded by pulling back on investments thereby kicking the can down the road for making needed improvements in their communities. In addition, the survey found that while a smaller portion of respondents said they increased property or income taxes in response to these cuts, a significant portion said they plan to do so in the near future or that they attempted to raise taxes but their efforts failed at the ballot box. When asked what specific services local governments cut, respondents said governments made cuts in three main areas: street maintenance, parks maintenance, and public safety, specifically police services. The OML report noted that many respondents reported that their entity experienced significant employee lay-offs or were not filing vacant positions as employees retired in response to funding cuts. These findings show the damaging effects of the Kasich administration’s policies on local governments in the last three years. The end result is that these cuts are working completely at odds with whatever economic recovery the state is trying to mount. Local governments’ responded by either reducing services and investments or raising local taxes – both responses impact local economies and the larger state economy negatively.

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