Local governments brace for budget cuts

Published 12:00 am Thursday, February 27, 2003

Local governments and other agencies already scraping the bottom of the barrel to make ends meet may be scraping it with a chisel if the state follows through with

funding cuts.

Tuesday, the Ohio House of Representatives approved House Bill 40, 52-44, to close the state's $720 million budget deficit without new taxes. The plan calls for the deficit to be made up by tapping surplus funds, speeding up the collection of sales taxes and cutting local governments.

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The house vote agreed to changes made to the budget by the Senate last week. Both chambers also rejected proposals made by Gov. Bob Taft to raise taxes on alcohol and cigarettes or enact a temporary sales tax.

Without the taxes, Taft has said he will have to cut $162 million from schools, universities, programs for the elderly and economic development, and part of the House-approved plan includes a $30 million cut to local governments, which has also been backed by Taft. The bill now goes to Taft.

State Sen. John Carey (R-Wellston) of the 17th District said he is a supporter of local government, but if House Bill 40 did not pass, the governor would have been forced to make an additional $288 million in cuts.

The bill's accelerated collection of sales taxes does not mean that anyone will be paying any more money --money would just arrive at the Statehouse more quickly, Carey said. Instead of filing their sales taxes at the 23rd of the following month, retailers making more than $1 million per year would have to file their taxes electronically weekly.

Both of Lawrence County's state representatives voted against the bill.

"People in big cities who live on concrete and in the wealthy suburbs don't realize how few dollars local governments have," State Rep. Clyde Evans, (R- Rio Grande) of the 87th District, which includes eastern Lawrence County, said.

Evans referred to this bill as a "correction budget." What happened to cause the deficit, he said, was not government overspending, but the state government having an unexpected reduction in revenue. When this budget, the one for 2001-2003, was created, state officials did not expect the drop in the national economy.

State Rep. Todd Book (D-McDermott) of the 89th District, which includes the western portion of the county, said his "No" vote was an easy one.

"I did not agree with balancing the budget on the backs of schools and local governments," he said. "It's repugnant."

Previous legislation did not call for cutting funding to local governments, but that provision was taken out of the bill on which the House voted, Book said. What will hurt governments, schools and other agencies eligible to receive cuts is that these cuts will last for four months, or until the 2003-2005 budget takes affect. Those receiving cuts will have to quickly find a way to deal with the cuts.

Evans and Book were both pleased that both chambers rejected increased cigarette and alcohol taxes, because cigarette retailers close to the borders of other states, such as those in Lawrence County, would suffer.

Local officials stressed the importance of their state funding.

After adding up requests from various county agencies, Lawrence County is expecting a $1 million budget shortfall. Commissioner Jason Stephens said funding from the state, sales and property taxes are the three biggest sources of revenue for the county. Receiving a cut in state funding, which goes into the county's general fund, will not help the county, he said. How much of a cut the county will receive remains to be seen.

At this time, the city of Ironton receives $500,000 from the state. This money goes into the city's general fund, Finance Director Cindy Anderson said. Like Stephens, she said the city has not been told how much they will be cut.

After motor vehicle and gasoline taxes are deducted, the village of Coal Grove receives approximately $52,000, according to Village Clerk Juanita Markel. This money also goes into Coal Grove's general fund. Losing this revenue, Markel said, could result in various cuts, including to the police and fire departments, street repair and other operations.

"They're going to keep cutting until there is nothing left," she said.

Local governments will not be the only ones feeling the pinch.

Joe Jenkins, director of the Briggs Lawrence County Public Library, estimates 98-99 percent of the libraries' funding comes from the state. Last year, the libraries suffered an 8 percent cut in funding. Also, he said, the libraries plan their budgets on a calendar year while the state plans its budget on a fiscal year. Every two years, a new budget is enacted in the middle of the year, making planning tough, he said.

The libraries will try to maintain their operating hours and staffing to serve the public, Jenkins said. However, they may have to cut their supply, programming and materials budgets.

Currently, the South Point Local School District receives $5.9 million per year in total formula aid from the state, school treasurer Dan McDavid said. This is distributed in 24 equal payments in the July 1-June 30 fiscal year. The district has not received notification about how much it may be cut in the future, but it may end up losing as much as $209,000 per year.

According to McDavid, the money the district receives is not much.

"After textbooks, maintenance, salaries and benefits, $5.9 million doesn't go very far," he said.

"You're never happy about losing money in the school system," South Point Superintendent Ken Cook said. "DeRolph said the government should provide better funding, and our legislators and governor should abide by that."