State Aid to Local Government Could Change Under New Plan

The Kasich administration is proposing to change the way it distributes money to local governments, introducing a plan would give precedence to communities with less capacity to raise their own funds.

The proposed new state budget sends some $380 million each year to cities, townships, villages and counties. The new proposal would set aside a portion of that local government fund. That money would be given to communities based on their ability to raise revenue locally.

“The little known fact of the existing local government fund is it goes to folks who have the greatest capacity based on property tax,” state budget director Tim Keen told the Ohio House finance committee on Wednesday. “And it is driven toward highly urbanized entities.”

Keen said the plan is to set aside 10 percent of the local government fund for this distribution next year, and 20 percent by 2020.

“We will array the counties based on their tax capacity,” he said. “And the lower their tax capacity, the greater share of the county pool they would receive.”

Keen said the same goes for cities, townships and villages.

Mayors are wary of what this will mean for them, according to Kent Scarret the executive director of the Ohio Municipal League, an association for cities.

“It seems to me that more money, at least from what I’m being presented right now, there will be greater concentration in communities that are less urbanized and that the state determines has less capacity to support itself,” Scarret said.

In a phone interview, Keen said he’s not sure if it will turn out to be the case that urban areas lose out.

The state plans to say more about the proposal next week.