The Senate Finance Committee concluded its public hearings on the state’s biennial budget, but lawmakers have a long road ahead to reconcile proposals for top priorities, including taxes and funding for education and local governments.
“The residents I serve and all Ohioans wonder why there are so many communities that have to (consider) more levies, bond issues and other ballot measures these days,” Dan Langshaw, a North Royalton city councilman, told committee members.
“Why are roads, highways, bridges and infrastructure falling apart in our state? The answer is local governments historically have not been getting the … funding that they need to address the issues in our communities,” Langshaw added.
Langshaw asked members of the Senate Finance Committee to increase revenue for the Local Government Fund (LGF) to 3.68 percent of tax revenues. Lawmakers are looking to increase how much the fund receives from 1.66 percent to 1.68 percent, which Keary McCarthy, executive director of the Ohio Mayors Alliance, called “a strong step in the right direction.”
Last month, the state House passed a nearly $68.9 billion, two-year state spending plan. But the biggest question centers on whether lawmakers will proceed with the Fair School Funding Plan, which proponents say is a transparent way to fund public schools in the Buckeye State and could cost more than $1.5 billion.
Under the current funding mechanism, funding for some districts such as Whitehall City Schools are capped and do not receive the full funding the current formula mandates. Others are on the “guarantee” and receive more funding than what the formula stipulates.
“Today, with the recent proposals, we are finding that our district stands at a proverbial funding cliff,” Brian Hamler, superintendent of Whitehall City Schools, told committee members. “We feel the need to sound the alarm, to show you how the current proposal, although well-intentioned, would pull the rug out from under our schools and our taxpayers.”
Meanwhile, Policy Matters Ohio highlighted an Institute on Taxation and Economic Policy (ITEP) analysis that found the top fifth of tax filers, who make $101,000 or more, would receive 62 percent of tax cuts in the budget. The study also found the middle fifth of taxpayers, who make between $42,000 and $63,000 per year, would see an average tax reduction of $68.
Greg Lawson, a research fellow with The Buckeye Institute, cautioned lawmakers that even though they are debating the budget at a time of historic economic expansion, they need to prepare for a potential economic downturn.
“Despite the many improvements that the Senate did make, we believe that the budget remains too large and too unsustainable to weather anything other than the sunniest economic conditions,” he said. “It misses a golden opportunity to continue to address rising Medicaid costs, and, more dramatically, it follows both the governor and the House in throwing simply more money at Ohio’s education bureaucracy despite the declining enrollment in the state.”
Added Lawson: “It’s better to make reductions now when you can be strategic and use a scalpel, as opposed to later on when something happens in the midst of one of the fiscal years, and you’re having to make much deeper cuts to certain programs. At that point, in order to balance things, then you’re taking not a scalpel as much, as you are a meat cleaver.”