Ohio Confronts Growth in Local Government Spending

By Patrick M. Malgieri

A study by the Rochester, New York Center for Governmental Research, reported in the July 22, 2012 on-line edition of the Tribune Chronicle, found that, among the regions included in its nationwide study, northeast Ohio (along with Minneapolis-St. Paul) had the greatest number of governmental units.  Statewide, 3,900 units of local government and public education in Ohio are governed by more than 20,000 elected officials.  In 2009, these units spent $107.2 billion, representing an increase of 124 percent over 1993 levels.  In that same period, the gross state product increased 72 percent and the state’s population grew by only 3.6 percent.  In northeast Ohio alone the per capita cost of government rose nearly 70 percent between 1992 and 2002, more than twice the rate of inflation.

The CGR report found that the growth in government contributed to an $8 billion deficit in the state’s biennial budget which was plugged through, among other things, significant reductions in state aid to townships and municipalities.  The state also responded by adopting legislation that enabled municipalities to collaborate and share services, largely in response to a statewide report entitled “Beyond Boundaries: A shared services action plan for Ohio schools and governments.”  It also created a local government innovation fund to reward best new collaborations.

From the earliest days of his administration, Governor Cuomo has cast a spotlight on the proliferation of local governmental units in New York.  While there is no agreement as to the exact aggregate number of municipalities, school districts, fire districts and special districts (independent and dependent), there has been growing, if not uniform, sentiment in the state to reduce these numbers through dissolutions and consolidations and to make the remaining units more efficient through the use of shared services and other collaborative efforts.  The report card on dissolutions and consolidations has been, at best, mixed.  Despite the availability of state funding, few units of local government have actively undertaken consideration of this step and even fewer have elected to actually pursue it.  Of the handful that have done so, only a miniscule number have secured the required voter approval.  Despite apparent public sentiment for greater tax relief and more efficient delivery of local government services, it appears that neither local elected officials, nor the electorate, are committed to eliminating or consolidating their respective units of local government to achieve those goals.

The track record in New York on collaboration and shared services is generally better.  Municipalities in New York have long had the legal ability to enter into these kinds of agreements (so-called intermunicipal agreements or “IMAs”) and to a greater or lesser extent, they have done so throughout the state.  Still, there are some legal limitations that stand in the way of even greater cooperative efforts.  For example, the statute that authorizes intermunicipal agreements in New York does not authorize public authorities (such as local housing authorities or transportation authorities) to be parties to such agreements. There are also other impediments embedded in other statutory provisions that prevent local government units and school districts from pursuing the full range of potential collaborative efforts.  Not to be ignored are the hurdles to collaboration presented by political (small and capital “p”), contractual and territorial issues and considerations of tradition, custom and practice.  For example, a recent effort by the town of Brighton in Monroe County to contract with the neighboring city of Rochester for fire protection services in a portion of that town has provoked significant opposition from the largely volunteer fire department presently servicing the district as well as a number of residents within that district.  That dispute has landed in the courts and, as of this date, remains unresolved.

NYMuniBlog has reported in a number of instances on issues related to the fiscal challenges facing local governments and school districts, including the most recent post linked here regarding the report issued earlier this week by the Office of the State Comptroller.  The “Great Recession” and its fallout have been particularly difficult on localities but the issues local governments confront, while no doubt exacerbated by the steep economic downturn, long predate the onset of this recession.  It is long overdue for state and local government decision-makers to ask, and answer, on a statewide basis a number of questions regarding how we will govern ourselves, what our governments will, and will not do, how they will do it and how they (we) will pay for it.