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News from the Ohio Municipal League as of June 17:
Thursday, June 30, 2011 8:15:11 AM - Middletown Ohio

Budget Cuts Coupled With Dramatic Policy Changes Included In State Budget

From Judy Gilleland - City Manager

In counting the days remaining on the calendar, there are roughly 13 days left for members of the General Assembly to come to agreement on how to close an $8 billion (some argue the number is lower but that’s a different topic) revenue shortfall in the two year biennial state operating budget. The House and Senate have named their respective conferees to serve on the Conference Committee charged with ironing out the differences between the House passed version of HB153 and the Senate version. The Conference Committee members are Representatives Amstutz, Carey and Sykes while the Senate conferees are Senators Widener, Jones and Skindell. The Committee held its first meeting on Wednesday to hear presentations by the Office of Budget and Management and the Legislative Service Commission on revenue and Medicaid caseload projections and to wrangle about what to do with an estimated $256 million in state revenue surplus once the budget is “balanced”. The next Conference Committee meeting has been tentatively scheduled for later next week with the goal being to have a bill agreed on and presented to the full legislature on June 27th or 28th and then sent to the Governor for his signature sometime before the June 30th deadline. As we have continued to report to you, the budget still includes the disproportionate 50% cut to the Local Government Fund, the repeal of the Estate Tax, the accelerated phase-out of the TPP and Dealer’s Intangible taxes, the new notification mandates that will cost our communities resources, and the prohibiting of municipalities to tax private entities who perform a public service for their community. These are a few of the most severely detrimental aspects of what the Ohio General Assembly is proposing to do to your communities through the major changes included in the budget bill, while offering virtually no “tools” for the “tool box”.

Besides those glaring examples of the state’s proposed severe changes in fiscal policy that will have a severe negative impact to our communities, the budget continues to include language added by the Senate Finance Committee which proposes a new statutory Local Government Fund distribution formula and establishes a new process for local governments to enact an alternative formula for distribution of the Local Government Fund, within each county. These statutes dealing with the distribution formulas have not been altered for many years. We feel it is critical that before wholesale changes are made to a system that a vast majority of local governments depend on, this dramatic legislative proposal should be fully vetted through the legislative process including committee hearings on what the result of the proposed changes would be to Ohio’s local governments. As a policy statement on the proposed amendment (SC-2479), the OML recommends that the language be removed from sub.HB153 and the issue be considered separately for the following reasons:

1. This proposal could impact all political subdivisions receiving LGF dollars. For that reason, the proposal needs to be studied in a thoughtful and transparent process with accurate revenue loss and gain figures in addition to serious input from affected local governments;

2. Funding for Ohio local governments are already threatened with the proposed overwhelming cuts due to other provisions in sub.HB153; changing the local distribution formula from a much diminished Local Government Fund could cause serious dislocations in anticipated revenues at the local level.

I urge you to contact your Representative and Senator immediately by email, phone or fax to share with them your concern to these unwarranted and potentially devastating changes to state funding as it relates to their partnership with local governments. The more input legislators receive from our public servants on the preverbal “front-line”, the much better they can relate to the real changes they will be creating.


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