Cities protest formula used to split taxes

By Mike Sever Record-Courier staff writer Published:

Aurora and Streetsboro officials are challenging how the Portage County Budget Commission splits a state tax fund among county municipalities.

On Wednesday, representatives of the cities asked the budget commission to consider re-enacting the tax split for a shorter period, and allow a thorough study and discussion of the Local Government Fund and the Local Government Revenue Assistance Fund.

The Wednesday work session was called because county commissioners had approved $50,000 of the county's $2.5 million annual fund share for the Portage County Park District, which constitutes a change to the formula that must be approved by a majority of participants by May 9, said Auditor Janet Esposito.

The county and the largest municipality (Kent) have veto over the formula, Esposito said.

Aurora and Streetsboro argue their industrial, commercial and residential growth have increased their need for financial support. They argue that their growth also has contributed to the increase in the local government fund, and that the two cities should share in those benefits.

"Why not go ahead and show support for at least discussion on this by recommending two or three years for the program and then study it?" Streetsboro Councilman Stephen Kolar said. "My feeling was this: once you have water go over the dam, it's awful hard to get it back. Once these issues are settled, they're put away and forgotten."

If re-adopted for the next 10 years, the formula would give the county $2.47 million, or 39.2 percent of the annual fund, and Kent would get 20 percent (or $1.26 million).

This year, Aurora would get 4.62 percent ($291,151); Streetsboro would get 3.95 percent ($248,928); and Ravenna would get 8.35 percent ($526,216).

The 18 townships share 14.34 percent of the fund, ($162,905 this year) with most getting about $50,000 each. For many townships that is a large portion of their general fund revenues, and townships are leery of re-figuring the formula because of the possibility they could lose money.

Aurora Law Director David Benjamin said the city supports establishing the current fund distribution as a baseline, and dividing new money according to new needs.

Both Benjamin and Kolar said the cities are looking at needs as defined under the allowed alternative formula.

Aurora sent letters to the budget commission and the county building department seeking detailed financial information regarding the local government fund. Mayor Margaret L. Duncan did not immediately return a phone call Thursday seeking comment on the issue.

Benjamin said he believes public officials can solve the problem without going to a lawsuit.

"What the city is attempting to do is gather as much information as they can to understand the basis of the distribution scheme that's being proposed," he said.

Benjamin said Aurora believes there are issues that arise in conjunction with growth "that we believe can be addressed in an alternative formula, when based on appropriate and reliable factors."

Kolar would not comment specifically if Streetsboro and Aurora are considering a lawsuit to stop adoption of the formula.

"If there was a suit filed, it would not be filed against our neighbors, but to change the system," he said.

Discussion became heated during the session, with Benjamin and Kolar pointedly questioning Prosecutor Victor Vigluicci about the basis for the current formula. Esposito, Vigluicci and County Treasurer Maureen Frederick make up the budget commission.

"That question was asked several times. It came down to the fact there was no formula," Kolar said.

Kolar said he understood the townships concerns. "I think they're afraid to engage again in a new formula because those small government funds are crucial to their budgets," he said.

"What Streetsboro and Aurora are saying is, we're not looking to reduce anybody's dollar amounts. We are looking to share the increase in any amounts" as the fund total increases over the current level, he said.

Kolar said the Streetsboro finance committee would look at other cities involved "and see what the worst case scenario would be."

Frederick said Thursday she understands the cities' concerns over the impact of development on their general funds.

"The fact remains the budget commission has to look at the law" as to what specifically may be defined as "need" in the statutory fund formula, she said.

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