Dear Elyria
and Area Constituents,
Out of
concern for the City of Elyria’s ability to deliver quality services, I am
asking for your assistance in urging members of the Ohio Senate, including Senator
Gayle Manning, to REMOVE three changes in the current Senate budget that will
have a negative impact on the financial health of local communities - including
the City of Elyria. The Senate will make
one last round of changes before it passes the bill next week and it is
important that we mobilize and communicate our concerns this week. A full explanation of the changes and the
negative impacts follow, so please call Senator Manning office to express your
concerns at (614) 644-7613.
Here are
the issues that will have a negative impact on
Elyria’s
budget and ability to deliver services…
Even with the
Local Government Fund (LGF) not being cut this time around, Ohio’s local
communities could still lose revenue under the current budget proposal. Below
are the three specific changes in the proposed budget that will result in
revenue losses for Ohio’s cities.
1. Local Government
Fund (LGF): The
percentage hasn’t been cut again, but funding for cities will still be about
$90m less.
- While we appreciate that the legislature has not made further reductions to the 1.66 percentage rate of the Local Government Fund (LGF), cities will still see less LGF because of a lower overall state budget.
- For local communities, this means that the total LGF disbursement will be about $90 million less in this budget than it was in the 2016-17 budget.
- The Senate version also redirects $35 million meant for cities to opioid treatment funding, which further erodes this revenue sharing program. The budget proposal also diverts an additional $24 million out of LGF intended for cities and villages to townships.
2. Throwback: This change will cost
cities and could create complications for businesses.
- By eliminating the Throwback rule - which allows cities to tax the sale of a good that is shipped to another location where a sales tax is not applied - many Ohio cities will see an immediate financial loss.
- Losing the application of this tax could also create complications for businesses in tracking how to apply a sales tax. It will cost some cites as much as a full-time police officer. Akron estimates that it will cost nearly $2 million in local revenue. For others like Grove City, it will cost nearly $850. This provision should not be eliminated, but if it is it should be done over several years to give communities time to adjust.
3. Centralized
Collection: Giving
businesses the option to file one return should not come at the
expense of Ohio’s cities and local
communities.
- The modified centralized collection proposal gives businesses the option to file one return through the state’s Ohio Business Gateway. However, the state will be collecting the revenue and distributing it back to the cities monthly.
- The state will also charge cities a 1% fee for administering this new program. For cities that don’t use a third-party administrator, which is most of the larger cities, this will be a net revenue reduction.
SUMMARY
Ohio’s local communities are on the front lines of Ohio’s greatest challenges and biggest
Ohio’s local communities are on the front lines of Ohio’s greatest challenges and biggest
opportunities. After years of funding reductions, additional
revenue losses to local communities – no matter how big or small – will have an
impact.
- Ohio’s local leaders are asking state policy makers to avoid implementing all of these changes all at once. The revenue impacts and the timing of these revenue losses for cities will have a negative impact on the financial health of local communities.
