AURORA — Mayor Ann Womer Benjamin said recently she has expressed her concerns to a high ranking Ohio Senate official regarding state funding cuts to local government subdivisions in recent years.
Womer Benjamin said the city is facing a significant loss of tax revenue with the elimination of the sales throwback provision, which impacts businesses’ calculation of net profit taxes. She discussed the topic with Senate President Larry Obhohf at a Portage County political gathering.
The Portage County auditor’s office reports that Aurora’s share of money from the state’s Local Government Fund will be $162,632 in 2018, compared to $168,710 in 2017.
In 2008, when Ohio began significantly reduced LGF distributions to counties, municipalities and townships, Aurora received $333,198, according to Ohio Department of Taxation figures.
"Like other municipalities, Aurora depends on reliable revenue streams such as the LGF and business taxes, not only to support city services, but to fund ongoing capital needs, especially with respect to our aging infrastructure," Womer Benjamin said.
"The state must recognize the heavy financial burden cities carry to maintain roadways, water lines and sanitary operations, never mind the increasing need to address stormwater issues.
"I expressed my serious concerns [to Obhohf] over the state’s ongoing attack on municipalities’ revenue resources and options to generate revenue," she added. "The latest state budget continues that trend."
All Portage County government subdivisions are expected to divide $3.6 million from the LGF in 2018, but that figure was $7.2 million in 2008, according to the Ohio Department of Taxation. It took a huge drop in 2009 to $6.1 million and the downward trend has continued.
In 2018, Portage County itself is scheduled to receive about $1.43 million of the $3.6 million total, with the county’s four cities receiving a total of $1.33 million, townships dividing $515,961 and villages splitting $326,223. Kent will get the most money among cities — an estimated $716,013.
"The LGF has been falling since 2008, and Aurora now receives about half of what it received back then — a loss of more than $160,000," said Womer Benjamin. "The elimination of the estate tax in 2012 was a significant hit to the city’s revenue as well.
"Fortunately, our income tax receipts have been growing, and as we aggressively seek new businesses and support the expansion of existing businesses, those receipts should continue to climb."
The mayor said Aurorans voted to increase the local income tax in 2003 and she has no plans to seek a further increase.
In addition to government subdivisions losing state funds, the same goes for public libraries. In 2017, Portage County four library systems are expected to receive $4.63 million, according to the auditor’s office, while that figure was about $5.4 million in 2008.
Library funds took a sharp drop after 2008, but have risen slightly each year since 2014.
The Local Government Fund was established in 1934 when the state sales tax was established. It is distributed based on several factors, including population. It is made up of a percentage of state general revenues, largely coming from income and sales taxes.
In 2008, the LGF and Local Government Revenue Assistance Fund were merged into one fund. The LGRAF provided local subdivisions with an additional share of state tax revenue, allocated to each of Ohio’s 88 counties according to each one’s share of the total state population.
All amounts received by a municipal corporation directly from the state LGF are paid into a local government subdivision’s general fund to be used for any lawful purpose.
The LGF and Library and Local Government Support Fund comprise the state’s "general purpose revenue sharing" programs for local governments.
According to a report from Policy Matters Ohio, a liberal think tank, Local Government Fund cuts and state tax changes have cost Ohio counties and communities nearly $1.2 billion from 2010 to 2017.
Phone: 330-541-9400 ext. 4189