Greater Ohio applauds the proposed 2012-13 budget for taking a bold first step in challenging local governments to modernize, but cautions that Ohio needs more tools to realize the vision of more efficient local government and to ensure a return to prosperity for Ohio. Recently the 2012-13 State Operating Budget was released in which bold proposals set into motion the streamlining and cost reduction of government operations, especially among local governments. In a response released by Greater Ohio– The 2012-13 State Budget Response and Local Government Restructuring Toolkit– we agreed that the status quo is not a winning strategy and to move Ohio’s economy into the 21st century, increased efficiency and savings among local governments are needed.
However, to return Ohio to prosperity, budget cuts MUST be combined with strategic and targeted investments; cuts alone will not bring about a climate of prosperity. Our response recommends legislative adjustments, new pieces of legislation, and the creation of some new state programs and policies to smooth the transition from the existing, antiquated structure of local governance to a modernized one.
We strongly recommend that the 2012-13 budget bill and subsequent legislation incorporate the following tools:
- Create a Governance Reform Commission to oversee the modernization of Ohio’s local governments by providing innovative leadership on governance reform, collecting data on local governments to help set efficiency standards, and offering technical assistance for local governments that are merging or initiating other new governance structures
- Create a framework for pooling resources regionally to pave the way for robust regional economic development by creating a regional revolving loan fund for needed infrastructure funding and economic development projects.
- Make permissive mergers, consolidation, shared services, and alternative governance structures and eliminate any legal and constitutional barriers. This could provide for a merger of city and county jurisdictions that results in consolidated service districts and governance, increased value for the taxpayer and a better business climate.
- Develop a protocol for collecting data on local governments’ costs and level of services, like the Cupp report for education, so that the Governance Reform Commission can create efficiency standards, evaluate the performance of local governments, and develop other indicators of performance.
In research conducted by GO and the Brookings Institution, we found:
- 86 percent of states have fewer governments per square mile than Ohio
- Ohio has 41.3 local governments per county and the national average is 27.9 local governments per county
- Ohio has moved from 9th highest in local tax burden to 6th highest among the fifty states, while the state burden has stayed stable at 33rd
- Ohio ranks 22nd nationally in instructional payroll spending, but its non-instructional payroll is 8th highest nationally (as a percentage of personal income)
It is clear that dramatic measures are needed to make Ohio average. Reducing and eliminating duplication in services will save money and free up resources Ohio can use to make strategic investments in assets to grow our economy. Fixing congested freeway interchanges, seeding venture capital investments or supporting anchor institutions have significant multiplier effects that will allow Ohio to realize the Governor’s vision of competing anywhere in the world. The underlying structure of local government in Ohio must change, and the State should drive this change.
To see our full analysis and a longer menu of policy tools that can be used to foster the necessary restructuring of local government, please see our 2012-13 State Budget Analysis and Local Government Restructuring Toolkit.