Governor’s Local Government Fund Changes a Small, but Good Step
Mar 03, 2017Local government officials are general well intentioned. They want to provide services to their constituents. Over the past decade many counties, cities, townships and schools have made sacrifices in order to focus on their respective communities’ essential needs. However, more must be asked of them. They must continue to wrestle with how to become as efficient with scarce resources as possible. Now is not the time to simply throw more money from Columbus at them.
As The Buckeye Institute has highlighted over the years, this antiquated form of revenue sharing between Columbus and local governments, including the Local Government Fund (LGF) that is funded by state general revenues (GRF), allows local governments to be less accountable to their residents.
Local decisions that entail new costs should be paid locally. Only then will local officials be forced to answer to the voters that put them in office. With money coming into their hands from Columbus, they are able to spend more and often kick the can down the road when it comes to making tough decisions.
At nearly $382 million in Fiscal Year 2018 and $393.5 million in Fiscal Year 2019 (see page 739 of Governor’s Blue Book) in each fiscal year, present LGF appropriations in the budget represents only around 1.5 percent of total GRF. However, that money exclusively goes to fund local decisions. Given that Ohio is sitting on nearly $2 billion each fiscal year in GRF (see same page in the Bluebook) that is set aside as a state subsidy for local levies as part of the 12.5 percent property tax rollback, it is time for locals to continue gaining their sea legs and stand on their own.
At the very least, the LGF should be re-directed to only those communities unable to raise adequate funds locally to pay for basic services. This would especially impact areas that have lower property values and smaller populations.
Governor Kasich’s budget plan to eventually spend up to 20 percent of the total LGF distribution on a needs basis is a small step in the right direction on this issue.