Friday, October 12, 2001

Ohio may cut aid to localities

Slumping revenue tightens fund

By Dan Klepal
The Cincinnati Enquirer

        Tough economic times are likely to get tougher for local governments throughout Ohio.

        State officials, trying to make up revenues that are off by $200 million in the first quarter of the fiscal year alone, may cut money from a “local government fund” sent to county, city and other municipal governments every year.

        The state already has told local officials that the amount of money they will receive from the local fund will remain the same as last year. That means $5 million less than Hamilton County was expecting.

        Now, the fund could be cut between 3 percent and 6 percent because of slumping revenues from income, sales, public utility and corporate excise taxes.

        Ohio Senate President Dick Finan, R-Evendale, said even a 6 percent cut across the board — excluding untouchable items such as education and Medicaid — may not solve the budget crisis.

        “We were hemorrhaging before Sept. 11,” Mr. Finan said. “Now we're in an unprecedented economic situation. You start losing $200 million per quarter, and we're talking real money.'

        If the fund is cut it would cost Hamilton County, which receives $24 million annually from the fund, an additional $1.5 million.

        “Considering other things are already down, it ain't going to be fun,” Commissioner John Dowlin said. He said $1 million amounts to a one-percent wage increase for employees.

        Keeping the fund at last year's level has already cost Butler County $164,000. Butler County usually gets about $5.4 million from the fund.

        “It's going to be hard to absorb on top of everything else,” said Butler County Administrator Derek Conklin. “It's not like people are asking for fewer services.”

        Warren County is in the same boat. Administrator Bob Price said he was expecting $3.3 million from the fund. That would remain at $3 million for his county before any cuts.


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