Amelia and Newtonsville: Two More Reasons to Reform Local Government in Ohio

Greg R. Lawson Oct 23, 2019

This opinion piece appeared in The Clermont Sun.

Add Amelia and Newtonsville, Ohio, two tiny Clermont County villages, to the growing list of exhibits in the case against Ohio’s failing local government structure. The financial picture in both municipalities is so bleak, in fact, that residents of both communities will take to the polls on November 5 to decide whether to dissolve the municipal villages.

Small-town Ohio has a lot going for it. But a byzantine, multi-layered tax structure that tries to support overpriced, redundant community services is not one of them. And the good voters and taxpayers of Amelia and Newtonsville will soon have their say.

Newtonsville, a village boasting fewer than 400 residents, has struggled with insolvency for years. In June, the little village showed a nearly $113,000 deficit in its general fund and the Ohio auditor’s office declared a state of fiscal emergency. In 2016, Newtonsville’s finances were so bad that the auditor decreed the village “unauditable.” Hoping to regain its financial footing, the village imposed a one percent income tax on its tiny tax base at the beginning of 2017—a tax hike that has proven incapable of keeping Newtonsville’s ledger in the black.

The financial distress is not quite as dire in Amelia, but there have been signs of duress for nearly a decade. In 2011, for instance, local officials considered dissolving the village police department and paying the Clermont County sheriff to provide police services instead. The proposal failed and the Amelia police department continues to protect and serve, but village services remain dismally underfunded despite the council’s controversial rush—in a single-reading special session—to levy a one percent earnings tax last year.

Amelia and Newtonsville are not alone in their struggles. Indeed, the two villages merely highlight the recurring need to rethink Ohio’s multi-layer municipal tax structure. Ohio taxpayers labor to make ends meet as they trudge beneath the weight of too much inefficient local government that may or may not even meet their most pressing needs. But rather than reform, consolidate, or even dissolve redundant layers of government, many of Ohio’s municipalities look to prolong their existence through tax hikes and accounting gimmicks—even when core services can and would be provided by other government entities.

All Ohio municipalities, for example, exist within townships and counties that offer core services—especially fire and safety services—to residents. In fact, Newtonsville residents already receive fire service from Wayne Township, not the village. So even if Newtonsville votes to dissolve, core safety services will still be available, but without the added layer of an insolvent village government that has tried to tax-hike its way to prosperity.

According to the Ohio Department of Taxation, Ohio suffers under more than 570 different municipal income taxes—the second most in the entire country. Added to the nearly 600 municipalities with an income tax are more than 600 school districts, 1,300 townships, and a range of other special taxing authorities, each with their own brand of tax burden. The layering-effect created by such a dizzying stack of local taxes consumes an absurdly high 4.5 percent of Ohioans’ income and has led one well-respected business and finance journal to rank Ohio among the 10 worst tax states in the country.

Ohio’s archaic municipal tax-and-spend structure continues to fail. Residents, taxpayers, and local communities continue to look for better answers to the deep financial problems created by layers of redundant, overpriced, and inefficient government services. There may not be a one-size-fits-all solution for every town, village, or hamlet in Ohio. But communities and their civic leaders should explore expanding cooperation, consolidation, and, yes, even municipal dissolution, before accepting another round of levies and tax hikes promised to prop-up one of the worst tax systems in America.   

Greg R. Lawson is the Research Fellow with The Buckeye Institute. You can follow him on Twitter @BuckeyeInstGreg.