LORAIN — A nearly $30.2 million proposed budget was unveiled to City Council Finance and Claims Committee members Monday.
The budget is $976,420 less than the 2013 budget. The reduction is primarily due to $891,518 less due to the abolishment of Ohio’s estate and inheritance taxes, according to Auditor Ron Mantini.
“Overall, it’s going to be a real tight year,” Mantini told committee members.
Mantini said after the committee meeting that projected budgets from department heads are about $32 million, but will be lowered to balance the budget before the March 31 passage deadline. Lorain ended 2013 with a $775,000 rainy day fund and a $153,600 surplus. Mantini said it was too early to project whether Lorain will end the year with a surplus.
Mantini projects receiving $2.3 million in state taxpayer money from the Local Government Fund down from nearly $4.7 million in 2011, when Gov. John Kasich took office. The majority Democratic committee members and fellow Democrat Mayor Chase Ritenauer criticized the Republican Kasich and the majority Republican Legislature for business and income tax cuts.
They accused Kasich, who inherited an approximately $6.5 billion deficit when he took office, of balancing the budget on the backs of local governments. Councilman Joe Koziura, D-at large, said cuts to local government have forced communities and school districts to raise local income taxes. “It’s outrageous and it’s not fair,” said Koziura, a former state representative and mayor.
Kasich has called eliminating the deficit the “Ohio miracle” and said it has revived Ohio’s economy. However, critics say the tax cuts disproportionately benefit the rich.
The wealthiest 1 percent of Ohioans, earning at least $335,000 annually in 2012, received about a $6,000 annual tax cut, according to Policy Matters Ohio, a liberal think tank. Those earning between $33,000 and $51,000 received a $5 annual tax cut while those earning less than $33,000 received a $24 tax cut.
Ritenauer said the miracle is that cities like Lorain have been able to pass local income tax hikes to offset the cuts and are still providing services.
“The tax cuts that are being passed out are having no real effect on the local economy,” he said. “The miracle is local cities and school districts coming together figuring out how to make this happen because it is tough, tough slog, budget year in and budget year out, to do that.”
Ritenauer and Mantini said it will be crucial for voters to pass a 0.25 percent income tax renewal levy on the ballot in May. The five-year levy, which raises $2.4 million annually, was passed in 2005 in response to the closing of Lorain’s Ford Motor Co., plant. Ritenauer said, “it’s going to be devastating” if the levy is rejected.
Councilman Dan Given, D-at large, said communities must expand shared services – such as combining emergency dispatching and merging health departments - to reduce costs in response to the cuts. “It’s about our only way out,” he said.
Contact Evan Goodenow at 329-7129 or firstname.lastname@example.org.