Grove City is joining an effort to encourage state officials to remember municipalities as they determine how to use a projected state-budget surplus.

City Council on Aug. 20 approved a resolution calling on Gov. John Kasich and the Ohio General Assembly to distribute budget surplus revenue to local communities.

"What we're saying with this resolution is we're in line, too. We have deteriorating infrastructure and we can't put the money in capital improvements that we used (to get from the state)," Mayor Richard "Ike" Stage said. "We're asking them to please share some of the wealth."

That wealth is a projected $147 million budget surplus at the end of the current biennium.

Kasich has proposed using the surplus to adjust withholdings from Ohioans' paychecks and increasing the state's rainy day fund.

Grove City and other municipalities have sustained substantial losses in state revenue due to a multitude of legislative actions over the last decade, Stage said.

The city's calculations have indicated Grove City stands to lose almost $3 million in revenue beginning next year because of state actions, he said.

"That represents over 10 percent of our general fund operating budget," Stage said.

Two years ago, the state provided an additional $20 million to townships "and municipalities got zero," he said.

Councilman Ted Berry sponsored the resolution.

The primary focus of the legislation is addressing the continuing decline in the state's local government fund, he said.

The total dollars municipalities receive from Ohio's local government fund has declined nearly 50 percent over the last seven to eight years, Berry said.

State lawmakers make the argument their actions are helping to cut Ohioans' taxes, he said.

"They'll use buzz words like 'cut your taxes,' " Berry said. "The problem is when they cut those (state) taxes, they are putting more burden on local governments to raise your (local) taxes. It's a shell game."

In cutting state money for cities, the general assembly has in essence told municipalities "if you can raise taxes in other ways, we can cut your funding," Councilman Jeff Davis said.

Stage said the list of state-funding losses for the city over the last decade includes:

* The three-year phase out of the business personal-property tax beginning in 2005 which cost Grove City between $300,000 to $400,000 annually.

* The 2012 reduction of the local government fund, resulting in a $500,000 reduction for the city. The same legislation also repealed the Ohio estate tax. "The estate tax wasn't a constant source of income every year," finance director Michael Turner said, but the city did receive $654,000 in estate-tax funds in 2013, a revenue source now eliminated.

* Legislation in 2014 eliminated the city's ability to keep businesses from reducing profits by losses occurring in a prior year. City officials believe this provision will cost the city as much as $400,000 in 2019, Turner said.

* The 2016 state budget bill eliminated the "throwback" provision in municipal tax codes and allows qualified businesses to exclude up to one-third of its profits from the city's net-profit tax. The city estimates this provision will cost the city $870,000 annually beginning next year.

Councilwoman Christine Houk voted against the resolution.

The issue of state funding for municipalities "is a rather nuanced discussion that this particular resolution puts in very broad terms," Houk said.

"It's not that I don't understand the spirit of the intention of the Ohio Municipal League and this resolution," she said. "I just don't believe that in general terms to be saying these (surplus) funds should be distributed to municipalities is impactful enough.

"If we feel there is a need, we should be saying what that need is," she said.

The discussion about state funding for municipalities has been occurring for some time now, Stage said.

"This is not new information, but there is a time when you have to step forward and say enough is enough," he said.

The time is now, especially given that there will be a new governor next year and possibly a change in the make up of one or both chambers of the General Assembly, Stage said.

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