Local Governments Would Lose Money Under Proposed State Budget

While Gov. John Kasich’s state budget proposal, released on Tuesday, is only a first step in the 2012-2013 budget process, it is a strong sign of where cuts may fall.  State funding for local governments is one of the areas expected to see some of those cuts. 

Under the proposal, in fiscal year 2013, the local government fund would receive about half of what it is expected to receive this year. Those cuts would be spread out with a reduction in fiscal year 2012, which begins July 1, and another reduction in fiscal year 2013. The budget overview document provided by the Office of Budget and Management does not outline how these cuts would be delivered on a local level. 

After the , Mayor Jerry N. Hruby said that he does not oppose the cuts Kasich is proposing. Everyone has to contribute to help balance Ohio’s budget, he said. 

In fact, Hruby applauded the governor’s “tenacity” and “courage” to make bold proposals that he knew would be unpopular. 

But, Hruby noted, while there are cuts coming for local governments, no one knows what they will actually look like at this point. 

“It’s a beginning,” he said. 

City Council President Larry J. Potla said that because the city anticipated state cuts, they were conservative when estimating this year’s revenues. He added that Brecksville isn’t very dependent on state funding, so other communities in the area may feel the cuts more strongly. 

Virginia Price, the city’s financial director, said only about 2.5 percent of the city’s current budget comes from state funding. But that doesn’t mean a reduction would be unnoticeable. 

“Obviously, any reduction in our revenue hurts,” Price said. The city is already preparing for the to leave its Brecksville campus this year, taking its income tax with it.

And it gets a bit more complicated because Brecksville’s fiscal year and the state’s don’t line up – the city’s fiscal year aligns with the calendar year, beginning in January, and the state’s starts in July. 

But it’s too early to tell how any possible cuts would affect the city, Price said, and local governments could lose funds through other types of budget changes. She added that they are watching it carefully and will continue to watch it as the state's House of Representatives and Senate make changes.

Brecksville’s administration always budgets conservatively, Price added, allowing for worst-case scenarios. And the city has a cash balance available to help fill any deficits between revenue and spending.  

The budget overview document also highlights areas that Kasich's administration believes will produce savings, and the local government level is no exception. The budget overview notes that the governor plans to break down barriers between cities, allowing local governments to better share resources and save dollars. The proposal also outlines plans to reduce mandates on local governments, offer more flexibility in things like construction and allow them to use technology to bring down costs.