Ohio municipalities could see a nearly 10 percent increase in funding over the next two years, according to a two-year budget proposal unveiled Monday by Gov. John Kasich.
The increase surprised area leaders because Ohio’s local government funding had dropped nearly 50 percent between 2011 and 2013, falling from $665 million to $348 million.
“It’s positive news,” Clark County Administrator Nathan Kennedy said. “We were expecting cuts or the elimination of local government funds.”
Under the proposed plan, the state’s Local Government Fund — tax money given to local governments — will jump to $363 million in 2014 and to $376.4 million in 2015.
Bethel Twp. Trustee Nancy Brown said she was pleased that the Local Government Fund may increase, but she said the slight uptick will not fix the township’s financial woes.
“Our savings will maintain us for a couple years, but we don’t anticipate we’ll be able to pay our elected officials and administrative staff to keep the township going,” Brown said.
Three years ago, Bethel Twp. received about $60,000 in local government funds, compared to a projected $25,000 for 2013. Township officials say they were also were hurt by the repeal of the estate tax, which brought in about $200,000 in 2010.
Brown said the township spends about $280,000 out of its general fund annually but expects to bring in only $117,000 in revenue because of state cuts and the lack of inside millage, or unvoted millage, for the general fund.
Ohio allows counties, townships, public schools and municipalities 10 mills of inside millage. Bethel Twp. receives inside millage for roads, but may be the only township or municipality without inside millage for general operating funds. The township’s levy request last year failed.
Kasich’s two-year state budget plan also included changes to the state tax code that the governor says will create a more business-friendly environment and will lead to job creation. The tax cut package totals $1.4 billion over three years, the administration says.
The state sales tax rate will drop to 5.0 percent, down from 5.5 percent, which will mean $2.4 billion less in revenues to the state budget over three years. The rate will drop but the tax will be applied to all services unless specifically exempted.
Clark County’s sales tax is 7 percent. Commissioners voted unanimously in February 2011 to extend the county’s temporary half-percent sales tax for 30 months.
Clark County Commissioner John Detrick said there’s no guarantee county leaders will reduce the local sales tax when the extension ends.
“Our situation is in a state of flux,” Detrick said, referring to local government funding, casino revenue and sales tax.
New Carlisle City Manager Kim Jones said the proposed state budget plan won’t have much of an impact on the city’s budget. New Carlisle’s local government funding dropped from $50,000 to about $25,000.
“We didn’t get a large amount of money to start with, but anything extra we get back would help,” Jones said.