NORTH ROYALTON, Ohio – State funds to North Royalton, Broadview Heights and Strongsville would increase over the next two years but Brecksville’s aid would decline, under Gov. John Kasich’s proposed new formula for determining financial assistance to local communities.
However, some local officials whose towns are slated for funding raises aren’t exactly jumping for joy. They say whatever increases they would receive aren’t much compared to cuts in local government funding Kasich has implemented since taking office in 2011.
“They (state officials) are waving a carrot in front of our faces, but they’ve already taken a bushel of carrots away,” North Royalton Mayor Robert Stefanik said.
“I think I can speak for all Northeast Ohio cities in saying that the state needs to make all the cities whole again,” Stefanik said. “If they are trying to sell these increases as a windfall for some cities, there’s a long way to go before they can call it breaking even.”
Kasich has proposed changing how Ohio allocates the $368 million state local government fund – which is distributed to municipalities throughout Ohio – based partly on a government’s ability to raise revenue through local taxes. The idea is that more money should go to communities with greater need.
Cleveland would lose $2 million under Kasich’s proposal for local aid; 51 other Ohio cities would also lose out
That apparently leaves out Brecksville, which has a sprawling industrial section with high-paying jobs. It’s share of state funds would drop, but Brecksville Mayor Jerry Hruby isn’t worried.
“We never relied on (Ohio’s local government fund) for our operating budget and considered all such funds a windfall,” Hruby said in an email to cleveland.com. “We use it toward capital improvements or debt reduction.”
But Stefanik and Broadview Heights Finance Director Molly Regan said their cities have been hurt, not just by local government fund reductions but also by the state’s elimination of the estate tax in 2013. Some municipalities are still receiving estate-tax residuals but the amount will eventually drop to zero, if it already hasn’t.
“We knew when the (Great) Recession hit, everyone had to tighten our belts,” Stefanik said. “So now the state should just give us back half the cuts, not try to bribe a few cities with a few dollars.”
Stefanik said Kasich, when he ran for president in 2016, touted how he built up a $2 billion state surplus.
“He was bragging about how he turned Ohio around, but he did it on the backs of cities and villages,” Stefanik said.
Regan was a little more upbeat, saying the extra money Broadview Heights would receive from the state would pay for one city employee’s salary and benefits, or perhaps additional road salt.
“But it’s a drop in the bucket of what it was,” Regan said. “The combination of estate taxes going away and reduction of local government funds did have an impact on every city.”
Kasich’s office did not comment in time for this story. Strongsville Mayor Thomas Perciak and Finance Director Joe Walker did not respond to several emails.
Dropping numbers
According to a cleveland.com database, North Royalton’s share of state local government funds would climb by 53.9 percent over the next two years under Kasich’s new formula. The amount would rise from $280,864 this year to $357,431 in 2018 and $432,315 in 2019.
In comparison, in 2011, North Royalton brought in $657,731 in local government funds, plus another $524,722 in estate taxes, for a total of $1.2 million, according to numbers provided by the city.
North Royalton’s local government fund-estate tax total crashed to $91,558 in 2013 before creeping back up again. See tables at the bottom of this story. In 2016, the amount collected in estate taxes alone had fallen to $32,568.
Broadview Heights’ share of local government funds would climb by 32.8 percent over the next two years under Kasich’s new formula. The amount would rise from $193,015 this year to $219,851 in 2018 and $256,297 in 2019.
In comparison, in 2011, Broadview Heights brought in $458,032 in local government funds, plus another $145,244 in estate taxes, for a total of $603,276.
Broadview Heights’ local government fund-estate tax total jumped to $881,396 in 2012 before steadily dropping. In 2016, the amount collected in estate taxes alone had fallen to $7,029.
Strongsville’s share of local government funds would climb by 18.8 percent over the next two years, under Kasich’s new formula. The amount would rise from $478,494 this year to $507,742 in 2018 and $568,611 in 2019. The city did not share past tax collection amounts with cleveland.com.
Brecksville’s share of local government funds would drop by 6.2 percent over the next two years, under Kasich’s new formula. The amount would fall from $125,304 this year to $106,634 in 2018 and $117,561 in 2019.
In comparison, in 2011, Brecksville brought in $347,684 in local government funds, plus another $437,753 in estate taxes, for a total of $785,437.
Brecksville’s local government fund-estate tax total then rose to $1.3 million in before starting a sharp decline. In 2016, for the first time, the city collected no estate taxes.
Local govt. fund & estate taxes: 2011 2012 2013 2014 2015 2016 Brecksville 785,437 872,750 1,282,923 351,013 366,479 127,842 Broadview Heights 603,276 881,396 514,993 289,670 279,672 206,719 North Royalton 1,182,453 826,063 91,558 516,314 369,396 350,555 Strongsville (did not submit data) City of Brecksville History of Collections Prepared 2/21/17 Estate Tax State Local Government County Local Government Total Local Government Fund 2009 991,566 167,410 180,761 348,171 2010 284,596 169,649 183,554 353,203 2011 437,753 163,181 184,503 347,684 2012 633,568 113,495 125,687 239,182 2013 1,156,884 92,498 33,541 126,039 2014 165,074 91,377 94,562 185,939 2015 201,964 71,805 92,710 164,515 2016 – 33,733 94,109 127,842 2017 Gov Budget 125,304 Broadview Heights Local Government and Estate Tax Revenue 2011 2012 2013 2014 2015 2016 Local Government $458,032 $313,148 $89,397 $215,382 $218,766 $199,690 Estate Tax $145,244 $568,248 $425,596 $74,288 $60,906 $7,029 Total $603,276 $881,396 $514,993 $289,670 $279,672 $206,719
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