Bexley city officials say they will closely monitor the Statehouse for reaction to Gov. John Kasich's biennial budget proposal as they attempt to deal with their own financial issues.

Bexley city officials say they will closely monitor the Statehouse for reaction to Gov. John Kasich's biennial budget proposal as they attempt to deal with their own financial issues.

Kasich's proposed budget includes a number of reductions designed to help the state overcome a projected $8-billion budget deficit. Following a public unveiling earlier this month, the budget proposal is now in the hands of state legislators.

Under Kasich's proposal, Bexley stands to lose 25 percent of Local Government Fund revenues in the first year of the budget and an additional 25 percent in the second year.

Ben Kessler, who chairs Bexley City Council's finance and judiciary committee, said his committee would continue to monitor the situation until a final budget is approved by the state. After review by state legislators, the budget must be approved by June 30 since the new fiscal year begins July 1.

Kessler said Bexley could suffer a more substantial hit if legislation calling for the end of Ohio's estate tax is approved.

Bexley received $1.9-million in estate tax revenue in 2010, according to finance director Beecher Hale.

"The budget, as I understand it, calls for a 25-percent reduction in local government funds in year one of the budget, with a further 25-percent reduction in year two," Kessler ssid. "We're still processing what is being proposed, but this cut was not a surprise, and we have been factoring in a cut of this magnitude in the discussions we've been having over the past several months relating to the proposed estate tax elimination and the status of our overall financial situation."

Kessler said Bexley city officials are keeping a close eye on developments at Broad and High streets.

"We will be closely monitoring reactions to the governor's budget at the Statehouse, and factoring in any changes to the proposal as we continue to discuss how to best deal with the substantial cuts to our funding model that have been proposed," he said. "I don't believe that this news impacts our current plan, which is to examine multiple scenarios ranging from making up for the lost funding with expense cuts alone, to making up for the lost funding with a mixture of expense cuts and new revenues. Either way, the city of Bexley operates a 'no frills' budget, so cuts in state funding directly and tangibly impact our ability to provide core services to our residents."

Hale said the city's projected operating shortfall for 2011, when taking into account the reduced Local Government Fund revenue, is $1.4-million.

"The city received $807,000 in Local Government Fund revenue (in 2010) which represented 8 percent of our general fund revenue," Hale said. "In 2011, the Local Government Fund revenue will be reduced $106,00 from the 2010 level and in 2012, the reduction will be $281,000 from the 2010 level."