Buckeye Institute...
Burden of Local Governments Exposed
by Greg R. Lawson
January 9, 2012 

Ohio is finally having a serious conversation about what kind of local government they want to have. As new property tax levies fail and the state has cut back funding, long-time problems are finally being recognized rather than papered over. 

Essentially, as the good time tides roll out, say during boom times shifting to recessions, one begins to see where the bodies are buried. Unfortunately, for Ohio many bodies are buried throughout the layers of Ohio local government and they make local taxes go ever upward. This phenomenon exists irrespective of ANY of the cuts that one reads about so often in their local papers. 

Take, for example, this story just run in the Dispatch talking about the many adjustments being made in Central Ohio suburban areas in the wake of cuts to the Local Government Fund (LGF), 

“Last year, Gahanna officials had a change of heart on a cost-cutting policy to delay snow plowing of the least-used city streets. A severe thaw and freeze had made several streets impassable.…Upper Arlington cut hours for several positions and eliminated the city’s longtime animal-control officer.

And three years ago, the city privatized trash pickup, requiring homeowners to leave containers at curbs instead of next to their homes, where carts would empty them.” 

In the grand scheme of things, those changes are rather small. Watching communities like Marion get hammered with serious layoffs of safety personnel is far more sobering. 

“Fifteen Marion police officers are without their jobs and patrols in the city will decrease by 25%. The layoffs are due to budget issues and now folks are nervous about what’s been cut.” 

What the Marion story and the Dispatch story have in common is that they result from the fact that local governments have grown unwieldy over the course of decades in the Buckeye state. 

Raising taxes, or at least attempting to raise them, has been a strategy that has been relied upon all too often for years. During less trying economic times than these, that strategy has often been successful for the local governments. So they have been able to feed the beast, especially as the state facilitated that with what amounted to heavy subsidization. 

Yet even with the major influx of money to local governments through the LGF, Ohio has the sixth highest local tax burden as a percentage of income in the nation. That was according to the Ohio Department of Taxation and, of course, before changes made in the last biennial budget that are driving communities to the ballot even more. 

Consider the following additional pieces of information highlighting just what the scope and burden of local government is in Ohio from the Buckeye Institute’s recent Joining Forces report, 

“As of October 2007, Ohio ranked seventh among states regarding the number of local governmental entities and taxing authorities according to the U.S. Census Bureau, with a staggering 3,702 entities.3 On average there are over 41 taxing authorities per county, which is 46 percent more than the national average of twenty-eight.4 

Ohio had the sixth highest number of municipalities (938) and townships (1,308). There are 614 school districts as well as a myriad of law enforcement and safety entities along with special district governments……According to ODT, the average Ohio home has an eye popping 25 levies placed on it for the provision of services ranging from schools and libraries to fire and safety. Also, Ohio has the second largest number of local income tax jurisdictions nationally at 774 (only Pennsylvania with a whopping 2,961 has more).” 

Think about that. An average of 25 levies on each house. Over 3,700 local government bodies. 774 municipal income taxing authorities, sixth highest local tax burden nationally, etc. 

More important than any of the changes made at the state level are these uncomfortable facts. This is Ohio local government. Ohio has a complex web of local governing structures with an almost infinite capacity to nickel and dime taxpayers. 

While this did not happen due to malevolent intent, nor did it happen overnight, unwinding this mess will be one of the defining issues Ohio faces over the next couple of decades. They need to be sure that they can continue to provide the resources and services constituents expect. But they must do so without breaking the bank. 

For far too long, Ohio has refused to have this conversation. The fact that it is happening now is not because anyone willingly chose to have the conversation. It is a result of necessity. Nonetheless, it is happening. 

Our Joining Forces report offers some ideas on how consolidation can be a serious tool in local officials’ toolkits for getting a grip on their spending. However, as important a tool as this is, it is not a panacea. 

Despite the outcome of Issue 2 and Senate Bill 5 last year, the issue of collective bargaining at the local level will not go away. Local public employee compensation cannot be ignored as the key driver for much of the costs imposed on local governments. 

On the bright side, a recent story in the Youngstown Vindicator indicates that Governor Kasich is seeking input from local governments on how to address some of their problems. Here’s hoping that a recognition of the burden local governments impose and how joining forces can play a role in resolving that burden is part of the message taken to him. 

Read this and other articles at the Buckeye Institute