43
Demise of tax deepens agency losses
RELATED: County to search for savings on electricity
YOUNGSTOWN
Accelerated phase-out of state payments to localities to replace tangible personal-property tax revenues will require some Mahoning County government departments to rethink long-range budget planning to compensate for losses, officials said.
The state eliminated the tangible personal-property tax in 2005.
“These are cuts that have been anticipated, but, I think the accelerated path of cuts is going to cause problems,” for the county’s boards of developmental disabilities and mental health and Children Services Board, said John A. McNally IV, chairman of the county commissioners.
In compensating for the revenue loss, McNally said he expects those boards to focus first on cutting expenses.
According to the Ohio Department of Taxation, combined TPP reimbursements to Mahoning County in the mental health and developmental-disabilities category dropped from $2,111,050 last year to $1,661,640 this year and will fall to $1,212,231 in 2012, with the reimbursement falling to zero in 2015.
“That is a lot of money to lose in such a short time,” said Larry Duck, superintendent of the county board of developmental disabilities.
When Gov. John Kasich released his budget on March 15, Duck had projected a seven-year phaseout of TPP money for the DD board with $1,662,244 in 2010 to zero in 2019.
On Thursday, the DD board’s fiscal officer, Marty Picciano, said he was unable to make new year-by-year calculations because mental health and DD are not separated in Wednesday’s report from the Ohio Department of Taxation.
To cut expenses, Picciano said the DD board would continue, “where possible,” to combine jobs instead of replacing employees who resign or retire.
On the revenue side, he said the board would try to maximize Medicaid reimbursements. The board plans to place a 2-mill, five-year renewal levy on the November ballot, but plans no new real-estate tax levies, Picciano said.
At the mental health board, which is getting about $450,000 in TPP money this year, that revenue source will also drop to zero in 2015.
Ronald Marian, mental health board executive director, said he expects to compensate for the loss by cutting allocations his board makes to mental health agencies.
He said he couldn’t make any additional cuts to his eight-member administrative staff. For the work his office does, Marian said he should have a 15-member staff, according to state guidelines. “We’ll trim things like travel and seminars,” he said.
Marian also said his board plans no new local property-tax levies. “We won’t raise revenue by trying to go for a tax increase,” Marian said, adding that he sees no way for his board to increase revenues to compensate for the loss.
At the county’s Children Services Board, TPP money was $781,255 last year. That sum will drop to $650,139 this year and zero in 2016, according to the new information. Previously, the phase-out was to be completed in 2018.
Having begun this year with a carry-in of $5.1 million from 2010, CSB projects its total revenues will be $13.17 million, and total expenses will be $15.8 million this year.
“Child welfare in Ohio has been hit with budget cuts from a variety of angles,” and Ohio provides the lowest state contribution to child welfare in the nation, said Denise Stewart, executive director of the county Children Services Board.
“In our efforts to deal with multiple cuts and cost shifts, we are identifying any and all areas where reductions can be taken,” she added.