Kasich Budget: local governments and schools suffer hidden cuts


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Sounds like everyone was anticipating large cuts to local governments from the State’s Local Government Fund, a designated percentage of the state’s general revenue that is distributed to counties and municipalities according to a formula. Indeed, the fund was cut by 25% in the first year of the Governor’s Budget and ramps up to a 50% cut in the second.

What was not anticipated was the additional nickel and diming of local units of government throughout the budget. By redirecting a the proceeds of various taxes from local governments and schools to the State General Revenue fund (see page B-6 of the Blue Book), they close the State’s budget deficit by taking money out of the pockets of local governments and schools. Here are a few of the less obvious cuts:

  • Accelerating the phase-out of replacement funds the State sends to school districts and local governments following the elimination of the Tangible Personal Property Tax. This proposal takes $289.5 million in FY12 and $589.5 million in FY13 from school districts and local governments.
  • Reallocates the Dealers in Intangibles Tax to the State’s General Revenue Fund. This proposal takes approximately $11 million per year from local governments and redirects it to the State.
  • Reallocating the Natural Gas Distribution (MCF) Tax to the State’s General Revenue Fund. This takes $66 million per year from local governments and school districts.
  • Reallocating the school district share of the Kilowatt Hour Tax to the state General Revenue Fund. This takes $140 million in FY12 and $150 million in FY13 from school districts.

Keep in mind, NONE of these cuts are included in the percentage reductions that the Kasich administration is admitting to in its funding for schools and local governments. In exchange, schools will see more of their funding siphoned off to charter and private schools through vouchers, while local government will be given “tools” such as SB5, which is sure to see legal challenges leading up to a ballot referendum. He also emphasizes the income they will receive from casinos – something held up by his administration’s delay in getting the oversight commission up and running.

We will work to quantify the net impact to schools and local governments, but we wanted to point them out as soon as we noticed them.

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  1. Kasich claims he’s increasing school funding; his budget shows a double-digit cut

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