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State budget likely to contain funding cuts for townships and other government bodies.
By Ed Runyan
WARREN
Now that the Ohio Senate has approved its version of the next two-year state budget, nine days remain for legislators to iron out the remaining details before final approval by June 30.
Among the biggest headlines have been cuts in the income- tax rate and taxes to small businesses.
But of more concern to some local government officials are measures that cut funding to townships and other government bodies though a tax that the state started phasing out 10 years ago and plans to resume phasing out during the next two fiscal years, starting next month.
A month ago, Larry Moliterno, a Boardman Township trustee, traveled to Columbus to address a committee of the Ohio Senate about the $576,000 the township currently receives through a program called TPP. Howland Police Chief Paul Monroe also testified.
The full name is tangible personal property tax, a tax that companies used to pay in Ohio to the school districts and local governments in which they were located, but the state eliminated it in 2005 to promote business growth.
Through 2010, the state said it would reimburse the schools and local governments for their lost tax revenue. The Legislature adjusted the process of reimbursing the schools and local goverments, however, and continued to reimburse at various levels, then froze the reimbursements at 2013 levels, according to the Ohio Office of Budget and Management.
Now Gov. John Kasich’s 2016-17 budget proposes phasing out the rest of the TPP payments to local governments.
That measure affects communities with lots of businesses the most, such as Boardman and Howland townships – which is why Moliterno and Monroe were among the Mahoning Valley officials who testified against it a month ago before an Ohio Senate committee.
“The roughly $576,441 that we receive today represents a very large amount of funding to Boardman Township,” Moliterno said. “If that were to be taken away, it means taking away six police officers or eight firefighters or two years of our annual paving budget.”
The state’s proposal reduces Boardman to $277,000 in 2016 and to zero in 2017.
Austintown would drop from $254,025 to $56,647 in 2016 and zero in 2017. Mahoning County agencies such as children services and develomental disabilities will also take big hits in the next two years.
Howland Township received $683,026 from tangible personal property taxes in the most recent year, but that will drop to $563,433 in 2016, $443,841 in 2017 and $324,248 in 2018 – a total drop of $358,778, according to state projections.
“Since the phase out of tangible personal property tax began, Howland Township Police Department has lost over $143,000 from our budget,” Monroe told the Senate committee. “To offset this loss, we passed a police levy which generated $304,000.”
“With the final phase-out of the Tangible Personal Property Tax, Howland Police Department will lose an additional $227,000. The Howland Police Department will be forced to make additional cuts in services and lay off three full-time police officers and four part-time police officers,” he said.
Weathersfield Township trustees wrote an “open letter” last month that criticized Kasich for amassing a surplus of $1.9 billion in the state budget through “drastically slashed funding to local governments.”
The letter says the result has been an increase in the number of local levies appearing on the ballot across Ohio from 2011 to 2014 from 1,335 to 1,560 – a 17 percent increase.
The Ohio Township Association says TPP money in 2014 paid townships $24.6 million, and phasing it out “will more drastically impact townships than other forms of government.”
In response to The Vindicator’s request for comment on the revenue losses local officials discussed, the governor’s office forwarded February comments from Tim Keen, the governor’s budget director.
In them, he stressed that the TPP phase-out includes a formula that reduces funding to the poorest government bodies by the smallest amount and no more than 2 percent of state and local resources each year for any government body affected.
Weathersfield Township received $193,969 in tangible personal property taxes in 2014, but it will drop to $189,430 in 2016, $153,584 in 2017 and $117,737 in 2018.
Weathersfield Trustee Gil Blair says the result of this additional cut to local government, on top of other types of cuts to local funding from the state, will lead to further deterioration of infrastructure within our communities because of lack of funds.
“What you’re seeing is local governments are not paving” roads, Blair said. “And we’re getting hammered by hard winters. What you’re going to see is an infrastructure crisis. In five to seven years is when the full impact will be felt. The roads are coming apart.”
State Sen. Capri Cafaro of Liberty, D-32nd, who voted against the Senate version of the budget bill Thursday, offered amendments that would have restored funding to mental health and addiction boards and children services that will occur as a result of the loss of the TPP funds. The amendments were rejected by her colleagues in the Senate.
In a news release, Cafaro addressed what she called a “lack of investment in our local communities,” saying they need help “to address crumbling infrastructure.”
She said 43 percent of Ohio’s roads are in critical, poor or fair condition, and 32 road levies have been on the ballot in Ohio so far this year. She said 5,700 county bridges are functionally obsolete or structurally defiient.
“Unfortunately, as we have seen over the years, our transportation infrastructure investment has been woefully underfunded. Ohio’s infrastructure needs are great, and we have consistently ignored our necessity to invest in public funding.”
State Rep. Michael O’Brien of Warren, D-64th, who campaigned to bring back tax dollars to his district that the state government took away, did not return requests to comment.