Court OKs funds method

The county auditor said the alternative formula has been popular.

By D.A. WILKINSON

VINDICATOR SALEM BUREAU

LISBON — The Ohio Supreme Court has, for the first time, upheld the law used to allocate state funds among all political subdivisions based on population instead of one that favored East Liverpool.

Nick Barborak, the Columbiana County treasurer and a former county assistant prosecutor, said the ruling was announced Wednesday.

The top court ruled in favor of a law that was changed in 2002 to allow local government funds to be distributed evenly.

The local government fund is composed of a percentage of revenue from state sales tax, use tax, personal income tax, public utility tax and corporate franchise tax.

At stake countywide in 2008 is $4.9 million.

In the past, the funds were distributed under a complicated formula that allowed the largest city in the county to get most of the money. In Columbiana County, East Liverpool, hard-hit by pottery and other business closings, took the lion’s share of the money.

But in 2002, the state agreed to allow all subdivisions to vote on an alternate allocation formula, which essentially changes the funding distribution to be based on each subdivision’s population.

The county budget commission earlier this week approved use of the alternate formula for next year.

Potentially costly

The county’s subdivisions might have had to come up with a repayment plan, the treasurer said, had the court’s decision gone East Liverpool’s way.

“There is a real possibility that many of the townships and municipalities would have experienced devastating consequences,” Barborak said.

He added, “I certainly can’t fault East Liverpool for trying. They did what they felt they had to do.”

There had been no direct ruling on the case before. In 2003, 2004 and 2005, the city lost because of procedural issues.

In 2006, the state tax appeals board ruled in favor of the alternative formula. East Liverpool appealed that ruling to the state’s top court.

“For the first time, the Ohio Supreme Court ruled on the merits” of the case, Barborak said.

County Auditor Nancy Milliken said that for 2007, the subdivisions are dividing $4,126,295.

The 2008 figure is higher because the state has now included additional revenue in the distribution. Milliken said that the alternative formula has been popular. Subdivisions representing some 87 percent of the county’s population voted in favor of it for next year.

wilkinson@vindy.com