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Gov. Kasich's proposed Ohio budget cuts



Published: Wed, March 16, 2011 @ 12:01 a.m.
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Executive Proposed Budget for FY 2012-13

Executive Budget for Fiscal Years 2012 and 2013

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Governor John Kasich

BIGGEST LOSERS

Projected Local Government Fund losses to Mahoning Valley entities over a two-year period if Gov. John Kasich’s budget is passed as is:

MAHONING COUNTY

$2.4M

Youngstown

$1.51M

Boardman

$335,000

Austintown

$256,000

TRUMBULL COUNTY

$2.25M

Warren

$850,000

COLUMBIANA COUNTY

$1.05M

Source: Elected officials

MORE PROPOSED CUTS

The governor is proposing various cuts to balance the state’s two-year budget, including:

• Libraries will see a 5 percent cut.

• A 25 percent cut per year in the Local Government Fund for two years.

• An 11.5 percent cut in K-12 education for fiscal year 2012 and a 4.9 percent cut for fiscal year 2013. That includes elimination of one-time federal stimulus money.

• Closing seven regional Taxpayer Service Centers, including one in Youngstown, and eliminating 99 jobs. That’s a savings of $1 million over the two years, not including the staff reductions.

• A 6 percent cut in fiscal year 2012 for the state’s seven business incubators, including the one in Youngstown, and the elimination of all funding for the incubators in 2013 to save a total of $15.9 million over two years. The state is expected to fund the incubators through the new JobsOhio program in 2013, however.

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

Gov. John Kasich’s budget proposal calls for significant cuts, 50 percent over a two-year period, to local governments that will put financially struggling Mahoning Valley counties, cities, villages and townships in an even more challenging position.

Kasich’s plan to balance the state’s two-year budget, with an expected $8 billion deficit, calls for a 25 percent reduction in Local Government Fund revenue to counties and communities effective July 1 of this year, and an additional 25 percent cut in July 1, 2012.

That proposal would save the state $555 million over two years. The Local Government Fund comes from state sales, personal income, utility and corporate franchise taxes.

Because counties and communities operate on a calendar year and the state’s fiscal year begins in July, the cut for the rest of this year is 12.5 percent.

Youngstown received $3.02 million in Local Government Fund revenue from the state last year. The city will lose about $377,000 during the last six months of this year, and an additional $377,000 during the first six months of 2012. Youngstown then will see an additional $754,000 decrease in Local Government Fund revenue between July 1, 2012, and June 30, 2013.

That means Youngstown’s Local Government Fund would drop from $3.02 million to $1.51 million over a two-year period beginning in July.

For a city with an estimated general-fund surplus of $50,000 this year, the proposed state cut makes it that much more difficult to balance the budget, said Youngstown Mayor Jay Williams. The city’s 2011 general-fund budget is about $39 million.

“We already have a lean budget,” he said. “There’s not a lot more we can cut, but we’re going to have to figure out where to cut. I understand the state’s condition, but this is detrimental to cities like Youngstown.”

ELSEWHERE

Boardman Township expected to receive about $670,000 this year from the Local Government Fund, said fiscal officer William D. Leicht. It will lose $335,000 over a two-year period.

“We heard numbers like that, but I didn’t want to believe it,” Leicht said. The fund “isn’t as a big part of our revenue as it is in smaller communities.”

The township’s budget is about $16 million this year, and before the cut, the fund made up about 4 percent of the budget.

“I think it will cause us to go to the drawing board with a [potential] upcoming levy. ... Now I think we also have to look at replacing the money we’re losing in the overall scheme of things,” Leicht said.

Poland Township had planned for $45,000 from the LGF this year before the cuts were announced. The township’s 2011 budget is $2.77 million.

Mike Dockry, Austintown administrator, said the township currently receives $513,000 from the state Local Government Fund. Under the proposed cuts, Austintown, with a $16.5 million budget, will lose $256,000 over two years.

“We’ll have that much less in the general fund, and the general fund is, if you will, the fund of last resort for police, fire, road resurfacing and sometimes for grants,” he said.

Dockry said the township’s financial situation will worsen in 2012 because Austintown will have less money to carry over into the next fiscal year.

“Right now, I think we’ll get through this year,” he said. “Next year will be more difficult because we’re not going to have as much money to carry over as we did in 2011, so things will be a lot more difficult.”

Canfield City Manager Joe Warino said compared to other surrounding communities, the city gets a much smaller amount — $31,000 — from the state, but it won’t go unnoticed.

“We’ll have to look for ways to make up the difference,” he said. “It would be more of city services that would be impacted.”

In Campbell, officials expected to finally emerge from a seven-year-long state-imposed fiscal emergency status by the end of this year.

But if the proposed budget passes, that may not happen, said Mayor Bill VanSuch and Finance Director Sherman Miles.

The cuts would mean the city would lose $32,000 after this year’s cut goes into effect in July, and $95,000 for the other 18 months of the proposed reduction, Miles said.

VanSuch said the city’s situation was promising. “It was looking good, but this is a slap in the face,” he said.

In Struthers, the cuts would not strap the city for this year, said Mayor Terry Stocker and Auditor Tina Morell.

Stocker said, though, that he didn’t think the cut would be that deep.

The city will lose $27,000 in 2011.

Next year, they said, the cuts will hurt.

“It’s shameful to think he would do something like this,” Stocker said, adding that the governor has said he wouldn’t raise taxes, but these funding cuts will result in local governments asking residents for more money.

Mahoning County receives $4.8 million annually from the state fund with all of it going to the general fund, said Commissioner John A. McNally IV.

The 25 percent cut in each year of the new state biennium beginning July 1, 2011, means a $1.2 million annual loss to the county, McNally noted.

“It’s always significant for the general fund because we have to make up that loss in income without a corresponding loss in services that we have to provide,” he said.

To make up for funding losses, McNally said he is interested in exploring sharing services with the cities and townships through such things as consolidation of 911 centers or of city and county building inspection services.

“All governments are going to have to continue to try to be creative on how we can make up some of these funding cuts,” because the cities and townships will also see cuts in local government funding from the state, he added.

TRUMBULL COUNTY

In Trumbull County, the cut is slightly larger than county commissioners had anticipated, but the budget they approved last week anticipated the state reduction.

The county receives about $4.5 million from the fund, meaning it will receive about $1.125 million less over the course of 12 months, beginning in July, Trumbull County Commissioner Paul Heltzel said.

The 2011 county budget is $2 million to $3 million less than in 2010, depending on whether you count a $1 million one-time payment from Ohio Edison in 2010.

The county budget resulted in about a 7 percent decrease for most departments, including a $600,000 cut for the sheriff’s office.

Heltzel anticipates that personnel reductions will be required in many departments to absorb the funding loss.

Warren officials also had anticipated the cut and had allowed for it in the 2010 budget, Mayor Michael O’Brien said.

Warren receives about $1.7 million each year from the fund, meaning it will get $212,000 less in 2011 than it did previously.

Gov. Kasich’s proposal would affect distributions starting with the second half of 2011, O’Brien noted.

COLUMBIANA COUNTY

Jim Hoppel, president of the Columbiana County commissioners, said the county had expected to get $2.1 million in local government funds this year.

The commissioners at one time thought the cut would be about 15 percent, he said.

Since the county has appropriated its LGF money, the county may have to tighten its belt in the last half of the year, he added.

Kasich’s budget also includes a 6 percent reduction in funding for the state’s seven business incubators, including the one in downtown Youngstown. The budget eliminates all funding for incubators in the 2013 fiscal year.

But Jim Cossler, the Youngstown incubator’s director, said he’s been told by the Ohio Department of Development that state funding will come from Jobs Ohio, a new organization in charge of the state’s economic development operations.

“The governor ran on job creation so it would be hard to believe he’d phase out one of the most successful job-creation programs in the state,” Cossler said.

Libraries would see a 5 percent cut in state funding under Kasich’s budget.

The Public Library of Youngstown and Mahoning County had expected a 15 percent reduction, said Janet Loew, its spokeswoman. The cut won’t impact library operations or its plans to expand hours starting April 25.

Contributors: Ashley Luthern, Elise Franco, Jeanne Starmack, Peter H. Milliken, Ed Runyan, D.A. Wilkinson



March 15 Kasich Budget Briefing 1
Gov. John Kasich and members of his administration discuss his two-year budget proposal.



March 15 Kasich Budget Rollout 2
Gov. John Kasich and members of his administration discuss his two-year budget proposal.



March 15 Kasich Budget Rollout 3
Gov. John Kasich and members of his administration discuss his two-year budget proposal.



March 15 Kasich Budget Rollout 4
Gov. John Kasich and members of his administration discuss his two-year budget proposal.



March 15 Kasich Budget Rollout 5
Gov. John Kasich and members of his administration discuss his two-year budget proposal.



March 15 Kasich Budget Rollout 6



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