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Ohio is not depriving locals
By Lt. Gov. MARY TAYLOR
Just as a harbor lighthouse signals storm-tossed sailors that calmer waters lie ahead, recent headlines in The Vindicator and other Ohio papers provide promising news about the economic future for local communities. After managing through the deepest and most stubborn recession in half a century, many local governments are reporting increased revenues and stronger balance sheets, thanks to a rebounding state economy.
Examples include recent articles about new police officers in Youngstown and Struthers and renovations to public safety facilities in Vienna. These and similar promising reports are welcome signals that more and more Ohio communities are recovering, at last, from the Great Recession.
Progress made
Looking back over the past 21/2 years, Ohioans can be pleased with the progress we’ve made in rebuilding our economy, knowing all too well that there’s more work to do. Balancing Ohio’s $7.7 billion budget imbalance in 2011 by restraining the cost of state government — but without raising taxes — was a heavy lift for Gov. John Kasich and I, and state legislators. But today we’re seeing the benefits of that hard work, with economic growth that is benefiting many Ohio communities.
Efforts to bring about fiscal stability required decisive action to see that state government tightened its belt, cut government bureaucracy and — among many other cost-savings — reduced state tax-dollar subsidies paid to local governments. While some local officials saw this drop in state support as leaving their glass half-empty, what state government is doing for local governments is actually making that glass half-full.
The 2014-2015 state budget bill signed by Gov. Kasich earlier this summer allocates 85 percent of the state’s operating budget back to local governments, school districts and other entities that provide local services. This means that 85 cents of every dollar collected by state taxes is passed directly to Ohio’s schools, cities, villages, libraries and others to support their local programs — mostly with few if any restrictions. Only 15 cents of each dollar is left for state government to meet its own needs: to operate state parks, prisons, public colleges and universities, mental health programs, environmental protection and dozens of other essential state services.
Local governments and school districts are set to receive nearly $14 billion in the new state budget ($13.6 billion in fiscal year 2014 and more than $14 billion in fiscal year 2015). Despite the media’s focus on the Local Government Fund, that particular subsidy will amount to $342.7 million next year, only 2.7 percent of total state payments to local entities. Overall, governments and other service providers at the local level will receive more than $13.2 billion from state government each year not including any payments they get from the Local Government Fund.
Changes to the Local Government Fund — one of the smallest categories of subsidy payments local governments receive from the state — was a far better alternative than the consequences communities and their residents would have seen if the state’s budget shortfall had not been addressed.
When Ohio faced this unprecedented budget imbalance, state government didn’t ask local officials to do anything that the state wasn’t doing itself: making the tough fiscal decisions needed to manage its dollars wisely through a worldwide economic crisis. For example, the Kasich administration made significant cost-saving reforms in key budget areas — including a reduction of state bureaucracy by about 9 percent — without hindering the delivery of services to Ohioans. State government has used innovative thinking to consolidate agencies and share services to become more cost efficient.
Recent news about merging school administrators and health districts in Mahoning County is evidence that the same type of innovative thinking is alive and well.
Government efficiency
If we can continue to drive our economy and create new jobs — while making meaningful changes to improve the efficiency of government — we will be well poised to become less dependent on new levies for economic support. Quite simply, a growing economy is the best engine we have to power our communities. In many communities, local tax revenues that help fund schools and local government are well above the levels from just a few years ago, proof that a growing economy is the best way to provide the resources that a government needs.
Just like every family and business in Ohio, our state and local governments have faced some tough times in recent years. Fortunately, by having the courage to make tough choices, the wisdom to effectively manage our finances and the foresight to make government work smarter, Ohio’s getting back on track.
Mary Taylor is lieutenant governor of Ohio and director of the Ohio Department of Insurance.