Pundits and media reports, including several articles in the Columbus Dispatch this past weekend, calling for significant changes to Ohio's governance structure indicate increasing attention being paid to governance reform recommendations outlined in Greater Ohio's Restoring Prosperity to Ohio agenda. Governance reform – including recommendations such as rewarding localities that adopt innovative service delivery and shared services -- is a major thrust in the Greater Ohio agenda, and is an area that needs to be addressed urgently and boldly, particularly in light of the current budget problems the state is facing. To capture this growing recognition of the need for local governance reform, we further recommend re-establishment of the former State and Local Government Commission as a logical next step to the Local Government Reform and Collaboration recently released report.
This newly established Commission would research and outline ways to implement key state and local government reforms, such as encouraging shared service delivery collaboration and making regional tax sharing permissive, intended to lead to great cost savings for Ohio taxpayers.
After reviewing the Local Government Reform and Collaboration's underwhelming final report, we looked around the state and country, where we found numerous places taking local government reform seriously. New York recently provided 20 highly specific recommendations focused on seven different areas of governance reform. In neighboring Indiana, a commission issued 27 bold recommendations that included townships and school districts.
In Ohio, we too, have examples of innovative governance reform, albeit smaller in scale:
- Montgomery County takes a portion of each year’s sales tax revenue to provide grants for economic development projects through it ED/GE program. Any increased property and income tax revenues collected are shared with program members.
- A 16-county group in northeastern Ohio is developing a structure for coordinated regional land use planning and tax sharing.
With a biennial budget gap of approximately $8 billion looming and data from our recent Restoring Prosperity report showing that local government payroll in Ohio is 17.5 percent above the average of peer states, the time for change is now. We encourage the next administration to make local government reform a high priority starting with the re-establishment of the former State and Local Government Commission, support the nascent efforts under way in our state and follow the lead of other states. As we have met with stakeholders and local interest groups throughout Ohio, we have found great interest in the re-establishment of this Commission and appreciate all the feedback and advice we have collected.
Our work has just begun – and there is much more work to do. The gap between costs and revenues at the local level continues to widen. We must act now to pave the way for Ohio’s entry into the competitive next economy. If we hold back now, we will pay later.