Communities struggling due to state cuts

Slashing taxes is not an effective way to promote job growth.

Columbus is taking half of the funds historically shared with local governments, schools and libraries, and using it to pay for state programs and cut taxes for the wealthiest. This means layoffs in Butler and Warren counties, slashed services in Montgomery and Clark counties, and less spending in all of our local economies.

Butler County, and its municipalities, levies, libraries and schools, lost $27.3 million in state revenue sharing and school funding over calendar years 2012 and 2013, compared to funding in the prior two years. Warren County’s loss was $37.5 million. Montgomery County’s revenues were down by $127.3 million and Clark County revenues fell by $25.2 million. Across the four counties, state aid for schools dropped by $148 million combined.

Levies and human services were impacted: Butler County’s children’s services levy, for example, dropped by $1.7 million, compared to historical levels, as the General Assembly reduced reimbursements it had previously promised when it eliminated local property taxes. Warren County seniors’ services lost $530,000. Sinclair Community College lost $3.6 million and the Clark County Health District lost $207,000.

All communities are struggling because of these cuts. Compared to the prior state budget, state aid from the Local Government Fund and tax reimbursements was down by $1.1 million in Lebanon, $2.1 million in Hamilton, $3.4 million in Middletown, $12.3 million in Dayton, and $81,000 in German Twp.

Southwestern Ohio counties are not the only ones hurt by these policies. Last year, Policy Matters Ohio called officials across Ohio to understand the effect of cuts in the last state budget. In many places, the immediate impact was job loss. In some places, it was new fees, as in schools across southwestern Ohio, where families had to pay for their young athletes to participate in sports.

Across the state, communities deferred repair of aging infrastructure, left parks untended, dimmed streetlights, furloughed police and firefighters, and closed pools and recreation centers. Seniors lost transportation and, in some cases, meals. One substance abuse agency sold raffle tickets to raise money.

The pending budget bill just passed by the House does not restore revenue sharing for school and local governments, although funds are available and local aid has been cut nearly in half, compared to historical levels. Spending is being cut so that taxes can be slashed. But states that reduced income taxes in the 1990s saw lower income growth and much lower job growth than states that did not make such changes, on average. Ohio, which cut its income tax in 2005, has seen slower job growth than the rest of the nation since.

There are more effective ways to create jobs — ways that, in contrast to tax cutting, would strengthen our communities. According to the Health Policy Institute of Ohio, expanding Medicaid to cover more low-income working families would bring $16.7 billion in federal dollars to Ohio over the next nine years and create an estimated 27,000 new jobs. In Butler, Warren, Montgomery and Clark counties, close to 38,000 low-wage workers would gain health care. By 2015, about 3,000 local health jobs would be created in these counties and $4.7 million in new revenues would be generated to help restore services.

These are some of the smart reasons that Gov. John Kasich included Medicaid expansion in his budget. Unfortunately, the legislature took it out and, while Medicaid might get expanded some other way, right now Ohio could lose this federal money and these jobs.

Cutting taxes for the wealthy deprives our cities and counties of revenue they need to have strong job markets. Communities suffer when public safety is at risk, parks are unclean, libraries can’t buy books and schools are falling behind. This can mean that housing values drop, and economies spiral downward.

The public sector provides a platform for private development. Good schools, affordable colleges, safe streets and clean pools are part of that platform. Good roads, strong bridges, and efficient and modern ports are also essential. A strong, healthy, well-trained workforce is at the heart.

It takes the public and private sectors working in harmony to create a strong economy. We need to work together, restore investment, and make our towns and cities welcoming places for people to live, work and build their businesses and their lives.

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