Boardman questions allocation of Local Govt. funds

By Ashley Luthern


“The more things change, the more they stay the same” is the popular government maxim.

It’s especially true of the Local Government Fund — a chunk of state tax funds given to counties, cities, townships and villages throughout Ohio — and how it’s divvied up once it gets to Mahoning County.

The state gives each of its 88 counties a certain amount of Local Government Funds. After that, it’s up to each county’s budget commission — made up of the county auditor, prosecutor and treasurer — to distribute the funding.

The last time the budget commission reviewed how it doles out the millions Mahoning County receives — in 2011 the amount was $10,420,378 — was in 1988.

As local governments decry the state’s cutting the Local Government Fund in half by 2013, at least one township in Mahoning County wants to re-examine how the fund is distributed.

“We are talking about money that should be distributed to all communities on a fair basis. Because it’s based on such an archaic formula that no one can really pinpoint, it might be time to revisit it,” said Boardman Township Administrator Jason Loree.

The governments receiving the largest shares in 1988 were Mahoning County at 50 percent; Youngstown at 24.6 percent; Boardman Township at 6.4 percent; Mill Creek MetroParks at 5.6 percent; and Austintown at 5 percent. As a result, in 2011, the county received $4.9 million from the LGF while Youngstown and Boardman received about $2.6 million and $662,163, respectively.

Since then the local governments have received the same percentage of the fund with the exception of the county, which now receives 47 percent because of annexations that brought more local governments into the county.


Loree argues that much has changed in 24 years, particularly population.

In 1990, Youngstown had a population of 95,732 and made up 36.2 percent of the county’s population, while Boardman and Austintown made up 14.6 percent and 12.2 percent of the population, respectively, according to the 1990 census.

Twenty years later, the 2010 census showed Boardman and Austintown making up 17.1 percent and 12.4 percent of the county’s population.

Youngstown’s population had dropped to 66,982 — 28 percent of the county’s population.

So using the 2010 census, Youngstown gets nearly four times the amount of money that Boardman does but has less than two times the population of Boardman.

Loree stressed the township is not trying to pick on other communities but said he and the township trustees are looking at the best way to manage and fund Boardman services.

Boardman is home to more than 40,000 people, he said, and traffic studies put the daytime population at about 100,000. In the past, Boardman has struggled to get levy approval to provide services used by residents and those estimated 60,000 extra people who travel, shop, work and dine there.

Boardman has to rely exclusively on property taxes. Under state law, it cannot levy an income or sales tax. Trustees have approached state lawmakers about possibly getting a slice of the county sales-tax pie — based on the rationale that an estimated 50 percent or more of the county sales tax is generated in Boardman — but that effort largely has stalled.

The county collected about $30 million in sales tax in 2011. Of that, trustees have argued that $15 million may have been derived from business, particularly auto sales, conducted in Boardman.

In contrast, Youngstown has been able to use a mix of income and property taxes to pay for services. It’s home to large Valley employers, such as Youngstown State University, two hospital systems and V&M Star.

Boardman Trustee Larry Moliterno pointed out the city also is slated to receive revenue from casino taxes.

“If Youngstown is going to receive casino money, then I think it would be an appropriate time to revisit the LGF,” Moliterno said.

The casinos will pay a 33 percent tax on gross revenue. The distribution of the casino-tax money was outlined in the 2009 Ohio constitutional amendment approving the casinos.

Youngstown will receive an estimated $2.5 million from casino-related taxes once all four casinos are fully operational, according to a Plain Dealer analysis of records from Ohio Department of Taxation, the Ohio secretary of state, the Ohio Department of Education and the U.S. Census Bureau.

The $2.5 million is a smaller estimate that takes into account the existence of racinos with video lottery machines that are predicted to lower the amount of tax revenue generated by casinos. The Plain Dealer estimated the city’s casino-tax revenue without racinos to be about $3.3 million.

The Ohio amendment states the largest city in each county will receive half of that county’s casino-tax revenue as long as the city had at least 80,000 according to the 2000 census. Youngstown had 82,026 residents, the 2000 census reported.


The state gathers LGF money from state intangible tax and estimated income, sales and use taxes, public-utility excise, corporate franchise and kilowatt-hour taxes.

Historically, state law has required monies from county’s LGF be doled out to individual villages, cities and townships based on the relative need of each community, according to the Ohio Department of Taxation.

But there were problems with that, said Anthony Magnetta, Mahoning County deputy auditor.

Local government budgets were “exaggerated” to appear as though they required more funding, he said. For example, a city might say it needed $1 million to make up for a shortfall, when it really could survive with $500,000.

The state then allowed counties to use an alternative method, leaving the distribution up to the county budget commission.

“The county budget commission may include in their method any factor considered to be appropriate. It’s the sole discretion of the county budget commission,” Magnetta said.

Mahoning County adopted the alternative method in 1988, and the formula derived then barely has been altered.

“The percentages when they selected the criteria for the alternative method, it’s tough to pinpoint exactly what methodology went into that. However, we know exactly what the formula is and what the percentages are,” said Mahoning County Auditor Michael Sciortino.

Magnetta said it most likely was derived using tax valuation and population, possibly among other factors. When the auditor’s office finally found a copy of the commissioners’ resolution from 1988, it stipulated only the percentages, not the underlying factors.

The county received 50 percent of the fund in 1988 based on state law that takes into account a how much of a county’s population is located within a municipal corporation. If 41 percent to 81 percent is in a municipality, then the maximum county share is 50 percent.

The last time the budget commission revised the LGF percentages was in 2004 when Fairfield Township was annexed to Mahoning County.

“Those changes were made solely on tax valuation. Fairfield comes in, they have ‘x’ amount of value, and we looked at a comparable entity that was already receiving [Mahoning County] LGF and based the percentage off that,” Magnetta said.

The budget commission took funds out of the county’s 50 percent share, which is why Mahoning County receives 47 percent of the LGF, instead of the 50 percent it received in 1988.

“Since 1988, we’ve had at least two [entities] going back, Salem and Fairfield, that have gotten portions of the LGF. The county is now getting less. Instead of redistributing everything and taking money off of other governments, they decided to take it out of the county share,” Magnetta said.


Sciortino said since he’s been in office, the budget commission never has discussed changing the methodology, which almost certainly would alter the percentages allotted to each city, township and village.

“Time has proven this to be a fair and equitable distribution. That’s why we haven’t changed it. If it’s not broke, don’t fix it,” Magnetta said.

“But why not do it right? If you’re not going to do it just because it hasn’t been looked at in so long, why not? What’s the fear?” Loree told The Vindicator, adding so much has changed in 24 years that it would be worthwhile to look at the distribution method.

Boardman Trustee Thomas Costello said the board believes “it is appropriate review all facets of government on a regular basis just as businesses must do.”

“The demographics of Mahoning County have changed substantially since 1988. With the retail and business shifts, as well as the dramatic population changes, certainly a re-examination of that the LGF formula is in order,” he continued.

But there’s a large obstacle to any change: If the budget commission changed the methodology, it would have to be approved by the Mahoning County commissioners, the most-populous city (Youngstown) and a majority of the remaining government entities, according to state law.

“If we were to go through this exercise, and this is very informal that we’re talking about it now, it would have to be a very thorough and comprehensive process,” Sciortino said.

Loree said Boardman is interested in petitioning the budget commission to re-examine the distribution methodology.

“We want to get a better sense of the process and make a recommendation to the budget commission to have that reviewed and see if there could better distribution for the communities,” Loree said.

But Sciortino said he doesn’t “feel the need at this point” to redesign the methodology for doling out the Local Government Fund.

“The focus should be on funding mechanisms, not trying to reallocate depleted sources. ... We need to do more collaboration with Boardman and other areas, rather than trying to rob Peter to pay Paul,” Sciortino said.

Even State Rep. Ronald V. Gerberry, who co-sponsored legislation in the Ohio House to restore cuts made last year to the Local Government Fund, has said measures to increase the LGF are likely to go nowhere.

Loree and the township trustees said they will continue to participate in regional projects and search for new ways to collaborate but are interested in learning more about the LGF methodology.

Sciortino said the budget commission could use any factors in the LGF methodology, such as need, crime rates, tax valuations and population, and Boardman could end up getting less than it does now.

Loree admitted that is a possibility.

“It may turn out that Boardman might get less when it comes down to it, but at least [the process] is fair and no one has anything to complain about,” Loree said.

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