The cutbacks came during the administration of Gov. John Kasich when the Local Government Fund, critical funding the state committed to pass back to local jurisdictions, was slashed by about 50%, according to Springfield City Manager Bryan Heck.
“The Local Government Fund was established when the state introduced the state income tax, and it was one of the commitments of the enactment, that they would pass money back into the local level,” Heck said.
“Gov. Kasich began an effort to pull that money back starting about 2010,” Heck said.
Springfield used to receive approximately $5.4 million a year, he said. Last year, that was about $1.9 million, “so it’s a significant reduction annually,” Heck said.
At the same time, the legislature has also eliminated the estate tax, 80% of which went to cities and townships. This year the proposed budget of DeWine calls for increasing funding for the Local Government Fund and for libraries from 1.66% of general revenue fund tax revenue to 1.7%.
That’s still not sufficient, Heck said.
“Every year we lose about $3 to $3.5 million that we used to receive and be able to put back into our community. It is a challenge for not just Springfield, but other counties and municipalities that have lost a significant source of revenue that could be used at the local level for local projects.”
City Commissioner Kevin O’Neill, whose tenure extends back to the period when cuts were enacted, said the reductions caused serious damage to local government efforts.
“The state has the money to restore it,” O’Neill said. “It was painful when it was implemented. Without local citizens voting for our levy, we’d be in deep financial trouble.”
The approval of a city income tax levy five years ago has been instrumental in enabling city leaders to maintain basic services such as police and fire safety and to provide needed infrastructure repair.
Springfield Mayor Warren Copeland, whose tenure on the commission also predates the state cuts in local funding, is not optimistic that Ohio cities will see the restoration of those dollars any time soon.
“State legislative leaders are from small towns and don’t care about this situation,” he told the commission and members of the public attending the meeting.
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