New report: Revenue Sharing Reform: On the Road to Ohio’s Recovery

Sep 04, 2014

The Buckeye Institute announces the release of a new report, Revenue Sharing Reform: On the Road to Ohio’s Recovery. The report shows that reductions in state spending on local government revenue sharing plans have not endangered the balance sheets of counties and local governments.

Key points include:

  • Local government tax revenues, particularly municipal income and county sales tax, have been increasing, not decreasing as the critics claim. Aggregate municipal income tax revenue rose by $230 million in 2012, and aggregate county sales tax revenue increased over $80 million in 2013. In both cases, only a handful of local governments implemented new taxes or raised rates;
  • Nine out of ten Ohio counties have a surplus in unassigned General Revenue reserve funds greater than the 5% reserve that the state must maintain in its “rainy day” fund. Nearly 90 percent of local municipalities do as well;
  • Ohio’s Local Government Fund (LGF) – one of the state’s revenue sharing programs subject to recent cuts – represents a very small percentage of what the state spends supporting local governments; roughly 2.5 percent of the $13.6 billion expected to be spent in 2014.Even before any of the Administration’s revenue sharing cuts, the LGF was less than 5 cents of every dollar in total state support for local governments and a little over 1 percent of total local revenues.

Report author and Buckeye Institute Policy Analyst, Greg R. Lawson states:

Local governments should take advantage of increasing general revenues and embrace shared services and, in some cases, consolidation. This, not the revenue sharing of old, will allow Ohio to more aggressively implement the free market reforms needed to improve its economy.

The full report can be found by clicking here.