Local Government Relief and Reform

Balancing the Budget and Restructuring the State Relationship with Our Local Government Partners

Ohioans shoulder higher combined state and local tax burdens than residents of most other states largely due to high local taxes. Changes to the Local Government Fund will reduce state revenue sharing with local government—a practice the federal government ended decades ago. To help local governments adjust to those changes, The Jobs Budget provides local governments and schools powerful new tools to help controls their costs.

Reducing Mandates: Multiple layers of state-imposed rules and regulations—many of them obsolete, redundant or counterproductive—drive up local government costs, often with little or no benefit to taxpayers. The Jobs Budget proposes several initiatives and reforms to help reduce or eliminate some of the most burdensome and outdated mandates, beginning a process of reform that will help offset the reduction in state support for local government.

Using 21st-century Technology: While E-Commerce and new methods of purchasing have transformed business, local governments are often barred from using these same modernizations and instead are burdened with pre-internet processes. The Jobs Budget allows local governments to leverage innovative E-commerce opportunities and use internet tools and websites for purchasing and advertising. The application of these and other 21st century technologies will provide immediate savings and benefits for taxpayers.

• Statewide Public Notice Website: Government activity should be transparent and information needs to be readily available to the public. For that reason, government has long been required to publish certain public notices in newspapers. Even newspapers publish their content on the internet today, however, and so should local governments. A new statewide public notice website for state agencies, schools, colleges and universities and local governments will provide a free, easily accessible location for those seeking to do business with government or who are interested in government procedures and activities. Governments will still be required to place ads in newspapers but they will be smaller and less costly since they will be supported by the statewide website.

• Online Advertising: Colleges, local governments and schools already raise revenue from advertising in publications, event sponsorships and naming rights for buildings, stadiums and facilities. The Jobs Budget provides this same type of flexibility to their internet websites, while setting appropriate limitations and oversight.

Promoting Shared Services: The Jobs Budget empowers local governments to collaborate through shared services partnerships to reduce their costs and increase value for taxpayers. By combining forces on less important back-office functions, governments can better focus on their core missions: servicing taxpayers.

• Local Government Shared Services: Currently, the laws governing how local governments can engage in shared services are so complex that they stand in the way of savings. In fact, townships have different laws for how they can cooperate on fire, police and ambulance services. These barriers are erased in The Jobs Budget so that local governments can more easily work together to provide better services and drive down costs.

• Centralized County Services: County commissions will be able to require other county offices to use centralized services for purchasing, transportation, vehicle maintenance, information technology, human resources, revenue collection, printing and mail operations. Independently-elected officials will maintain the authority to carry out their core functions, while creating economies of scale for back-office administrative functions.

• Education Shared Services: In education, several types of regional support groups currently exist--ESCs, ITCs, RABs, etc.—but often duplicate or provide inconsistent arrays of services. The Jobs Budget calls for integrating these entities by July 1, 2012 with a single collection of Regional Shared Service Centers that could provide administrative support services to both school districts and local governments.

• Pooled Health Care: Local governments recognize the buying power of the state and have often asked to join the state’s health care pool. Similarly, since 2006, the School Employees Health Care Board has been studying ways to provide quality health care for school employees at lower costs. In response to this need, The Jobs Budget will create a new combined health insurance program that local governments and schools can join if they choose. Managed by the Department of Administrative Services, it will be known as the Ohio Public Employees Health Care Program. It will be managed separately from the state employee program while still providing group savings and the experience of professionals who know how to negotiate and manage large group health care plans.

Flexibility and Cost Containment: In addition to the estimated $1 billion in savings that local governments will realize annually from collective bargaining reforms pending in the General Assembly, the Jobs Budget proposes additional flexibilities to provide savings:

• Construction Reform: On some building projects, colleges and universities, schools and local governments will be able to replace multiple prime contractors with a single prime contractor, and use the design/build process to share risk and create new incentives to bring construction costs down.

• Local Government Budget Flexibility: County commissioners will be able to adopt a quarterly spending plan to adapt budgets to mid-year changes in revenue. They will also be able to utilize furlough days during times of fiscal distress, and modify work weeks. These changes will ensure delivery of services while maintaining fairness for employees.

THE OUTCOME: The structure and operation of local governance in Ohio has experienced little change since the 19th century, while mandates have grown more costly and complex. Reforming the ways local governments are structured and funded—while taking advantage of technological tools adopted by businesses long ago—allows local communities to become more fiscally sustainable, reduce their costs so they can begin reducing their taxes, and improve the quality of services they provide to their citizens.

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