Opinion: State budget cuts hurt communities
Posted September 22, 2014 in Op-Eds
Across Ohio, local governments have fewer resources to provide public services than before the last recession. State budget cuts and the erosion of inflation prevent many Ohio communities from resurfacing roads, reopening recreation centers and rehiring firefighters and police at pre-recession levels.
The state cut Local Government Funds to towns, cities and counties in half, and piled on further cuts. It phased out revenue streams that replaced local business taxes earlier in the decade. It abolished the estate tax, which applied only to the wealthiest 7 percent of estates, a primary source for local government purchase of big-ticket items like fire trucks, police fleets and courthouse roofs.
A recent analysis in the Cincinnati Enquirer found a modest rebound in local revenues and some stabilization of local public finance in Ohio since 2010. Encouraging as that is, localities are not getting what they need to keep communities strong.
The state will share even less revenue in the future. Ever since the establishment of the personal income tax in the 1970s, the state has paid 12.5 percent of the local property tax bill for homeowners. Legislators eliminated that “rollback” on new and replacement levies in the last budget bill.
Some special interests in Ohio promoted cutting taxes and public services as a way to stimulate economic growth. Legislators responded by making deep cuts to Ohio’s income and corporate taxes. The wealthiest 1 percent of Ohio households has gotten tax cuts worth about $20,000 on average annually during this past decade of tax cuts, while low- and middle-income taxpayers are actually paying more.
The trouble is, this strategy has not worked.
Job creation in Ohio lags that of the nation, despite all the tax cuts and the cuts to public services and schools. Some communities have experienced recovery, but many have not.
One of the most troubling aspects of this uneven recovery is how deeply some of our communities and some people have been harmed. Budget cuts to senior service levies have hurt seniors as senior center hours are curtailed in some places and transportation services eliminated in others. Closing swimming pools and basketball courts has hurt kids. The foreclosure crisis clobbered the property wealth of many homeowners, while funds for property rehab and demolition remain inadequate. Children’s service levies in Hamilton County lost $4.6 million of state aid in the budget for 2012-13 compared to the prior state budget. Senior service levies lost $1.7 million.
Policy Matters Ohio has chronicled the impact of the cuts across the state. Local governments will operate with $1.5 billion less in 2015 than they had in 2010. This includes the addition of new casino revenues. Statewide, this is a significant loss and it can mean real harm to local communities. The Ohio Municipal League’s last financial survey found that these cuts amounted to 5 percent of local governments’ general fund budgets, on average. The smaller the jurisdiction, the deeper the blow: Those places with the smallest budgets suffered a loss of almost 16 percent of their general revenue funds, on average. That does not take into account inflation.
The cuts compound a decade of reduction. In October 2013, Cincinnati.com reported Hamilton County’s budget had shrunk by a third over the past decade. A jail was shuttered. The pace of business services slowed. This is happening all over the state. The community of Whitehall in Franklin County put plans for a new recreation center on ice. The city of Bucyrus laid off four first responders; one sheriff, alone, watched over 12,000 town residents at night.
The Kasich administration promises to seek additional income tax cuts for the most affluent while minimizing the outcomes of budget cuts to local government. But our communities cannot afford to lose more revenue. We can’t afford larger classes, fewer bus routes, shorter pool hours and fewer firefighters.
Local public services support our quality of life, protect family wealth and underpin opportunity. We all deserve sound, dependable services and stable public finance
Original Article: http://www.cincinnati.com/story/opinion/contributo...