Ohio Cities Wary Of Proposed Changes To Local Funding

Feb 3, 2017

The Kasich administration is proposing to change the way it distributes money to local governments. The Ohio governor’s plan would give precedence to communities with less capacity to raise their own funds.

The proposed new state budget sends some $380 million each year to cities, townships, villages and counties. State budget director Tim Keen took questions on the plan at a house finance committee meeting this week.

“The little known fact of the existing local government fund is it goes to folks who have the greatest capacity based on property tax," Keen said. "And it is driven toward highly urbanized entities.”

A new proposal would set aside a portion of that local government fund. That money would be given to communities based on their ability to raise revenue locally.

“We will array the counties based on their tax capacity," Keen said. "And the lower their tax capacity, the greater share of the county pool they would receive.”

Keen says the same goes for cities, townships and villages. He says the plan is to set aside 10 percent of the local government fund for this distribution next year, and 20 percent by 2020.

Mayors are wary of what this will mean for them. Kent Scarret leads the Ohio Municipal League, an association for cities.

“It seems to me that more money, at least from what I’m being presented right now, there will be greater concentration in communities that are less urbanized and that the state determines has less capacity to support itself,” Scarret said.

Budget director Keen says he’s not sure if that will turn out to be the case. The state plans to say more about the proposal next week.