The anticipated state cut in the Local Government Fund (LGF) would keep Gahanna from having a 2012 balanced budget, according to city leaders.

The anticipated state cut in the Local Government Fund (LGF) would keep Gahanna from having a 2012 balanced budget, according to city leaders.

While reviewing the city's budget June 27, Mayor Becky Stinchcomb told city council's finance committee the administration would present a balanced budget if it weren't for the state's LGF reduction.

"That cut is showing itself," she said.An estimated projection of the 2012 general fund shows a $166,623 deficit, with $22,563,664 in revenue and $22,730,287 in expenditures.

Finance director Angel Mumma said a major change from the 2011 appropriations is a $445,000 decrease in LGF revenue.

"Had the Local Government Fund been left in place, this budget would have shown a positive variance of $278,377," Mumma said.

"The effects of the reduction in this funding source cannot be underestimated."

The anticipated 25-percent reduction of the LGF revenue source will start in the second half of this year, as the state begins its 2012 fiscal year in July. Gahanna's budget is based on a calendar year, from January to December.

Mumma said 2012 would be a combination of the 25-percent reduction for January to June and a 50-percent reduction from July to December.

"While state revenues are increasing, these increases will not be enough to offset the tremendous cuts that we face as the recipient of these dollars," she wrote in a memo to council.

The administration recommended tapping into the unencumbered balance of the general fund to make up the difference between planned revenue and planned expenditures.

A breakdown of the 2012 general-fund expenditure distribution comprises 64 percent for personal services, including salaries and benefits; 19 percent, operating expenditures; 14 percent, contract services; and 3 percent, transfers.

General-fund revenue comprises 63.7 percent, income tax; 7.7 percent, real estate tax; 5.1 percent, interest and investment income; 4.9 percent, recreational income; 4.8 percent, administrative/service charges; 4.7 percent, fines and fees; 4.1 percent, LGF; 2.2 percent, other taxes; 1.4 percent, licenses and permits; 0.9 percent, miscellaneous income; and 0.5 percent, grants.

In dissecting the budget June 27, council rejected the administration's recommendation to cut salaries in half for the records commission, civil-service commission, planning commission, board of zoning appeal, parks-and-recreation board and landscape commission. The cut would have saved the city $26,811, including benefits, over the course of one year.

Council member Tim Pack said the people who serve on those boards and commissions help make Gahanna great.

"These people put in a lot of hours," he said. "Obviously, they don't do it for the money. But there's a lot of work these people do."

Council member David Samuel agreed that board and commission members spend an enormous amount of time during the meetings and preparing for meetings.

"I would prefer a pay freeze," he said. "Our non-labor-union (employees) and directors have been at a pay freeze. That's another issue. We'd like to see the recommendation to keep the wages as they are."

Council is scheduled to vote on the 2012 budget July 5.

The city is required by Ohio Revised Code to adopt a budget and submit it to the Franklin County Auditor's Office by July 20 each year.