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FY 2012/2013 BUDGET OVERVIEW

FY 2012/2013 BUDGET OVERVIEW. User Note. Please note the page numbers following various sections of this powerpoint. This page number corresponds with the associated page number in your budget overview. The overview and powerpoint can be found on the CCAO website at www.ccao.org

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FY 2012/2013 BUDGET OVERVIEW

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  1. FY 2012/2013BUDGET OVERVIEW COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  2. User Note Please note the page numbers following various sections of this powerpoint. This page number corresponds with the associated page number in your budget overview. The overview and powerpoint can be found on the CCAO website at www.ccao.org In addition, CCAO is producing numerous county advisory bulletins to provide commissioners even greater detail on numerous budget provisions contained within the powerpoint. COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  3. Revenues LOCAL GOVERNMENT FUND (LGF) TANGIBLE PERSONAL PROPERTY (TPP) & UTILITY REIMBURSEMENTS CASINO REVENUE COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  4. Local Government Fund COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  5. Local Government Fund • Estimated loss of LGF to local governments: • $129 million in SFY 12 • $406 million in SFY 13 • $535 million over biennium • CY distributions from the LGF: • $650 million in CY 10 • $648.2 million in CY 11 • $465 in CY 12 • $185.5 million first six months of CY 13 • All dealers in intangible tax redirected to state GRF in 2012 - annual loss of $11 million to LGF (p. 7-9) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  6. Local Government Fund • Budget replaces percentage of tax revenues received by state GRF each month with: • 75% of SFY 2011 base year allocations in SFY 2012 • 50% of SFY 2011 allocations in SFY 2013 • Budget proposes to reset to percentage of revenue approach in SFY 14 based on dividing SFY 13 LGF deposits by total SFY 13 tax revenues. (The “reset” may be revised by next state budget.) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  7. Local Government Fund • Three factors affect level of cuts particularly in SFY 12 • 25% cut first applied beginning in August 2011 – state revenue growth reflected in LGF distributions for first seven months of calendar year • From August 2011 through June 2012 all 88 county undivided local government funds to receive proportionate share of additional $ 50 million • During SFY 12 and SFY 13 each county undivided local government fund will receive no less than the smaller of $750,000 or the amount received during SFY 2011 COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  8. Local Government Fund • Minimum distribution provision provides additional distributions of $1.3 million in SFY 12 and $5.1 million in SFY 13 • Counties affected by this minimum distribution provision include: Adams, Brown, Carroll, Fayette, Gallia, Hardin, Harrison, Henry, Highland, Hocking, Holmes, Jackson, Meigs, Monroe, Morgan, Morrow, Noble, Paulding, Perry, Pike, Van Wert, Vinton, and Wyandot. • $50 million supplement and the minimum distribution provisions do not apply to portion of LGF distributed directly to qualifying municipalities COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  9. Local Government Fund COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  10. TPP & Utility Reimbursement COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  11. TPP & Utility Reimbursement • Total estimated combined budgetary loss to schools and local governments from accelerated phase out of tangible personal property (TPP) and public utility replacement payments is $587 million in SFY 2012 and $845 million in SFY 2013. Savings to state are equivalent amounts. • In CY 2010, counties received reimbursements from both sources of $297 million. Under state budget, reimbursements will be reduced to $165 million in SFY 12 and $110 million in SFY 2013 (p. 9-10) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  12. TPP & Utility Reimbursement • Savings to the state from accelerated reductions in reimbursements to counties form both sources (TPP & Utility) was estimated to be roughly $100 million per year in SFY and SFY 13. • These savings to the state are in addition to savings the state realizes as a result of the gradual phase out of TPP and Utility Payments under prior law. • Losses to counties would be an equivalent amount. COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  13. TPP & Utility Reimbursement • Budget accelerates phase-out of reimbursement for lost TPP and public utility tangible property taxes • TPP was eliminated by tax reform (2005), full reimbursement with Commercial Activity Tax (CAT) (2006-2010), old law provided phase down 2011-2018, • Electric and natural gas deregulation occurred in 1999 and 2000, kilowatt hour tax (KWH)and natural gas (MCF) tax created, in part to reimburse local governments for lost revenues COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  14. TPP & Utility Reimbursement • In 2010, 100% of CAT devoted to local reimbursement for lost TPP, 70% schools, 30% other local governments • Under state budget, by 2020, 100% of CAT dedicated to State GRF • In 2010, 63% of kilowatt- hour (KWH) tax dedicated to state, 37% dedicated to schools and local governments • Under state budget, in 2012, 88% of KWH dedicated to state, 12% of KWH dedicated to local governments, by 2030, 100% dedicated to state COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  15. TPP & Utility Reimbursement • Prior to state budget 69% of MCF revenues dedicated to schools, 31% dedicated to other local governments • In 2012 under budget, 100% of MCF tax dedicated to state GRF(approx. $66 million) • Beginning with second payment in 2011, reimbursement payments are phased out for TPP and utility property, but phase out is limited to no more than 2% of total resources each year COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  16. TPP & Utility Reimbursement • For counties, for purposes of the phase out, qualifying levies are broken into five service functions: mental health and developmental disabilities, public health, senior services, children services, and other county levies, which includes county general fund • The phase out schedule for each of the five is calculated independently COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  17. TPP & Utility Reimbursement • For the four defined services, total resources are: • Sum of their 2010 reimbursements under TPP and utility property • Collection year 2010 real and public utility property taxes • Rollback and homestead reimbursements • For the other category, total resources are: • Resources mentioned above • Base county sales tax (Excluding additional county sales tax) • county share of LGF for 2010 COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  18. TPP & Utility Reimbursement • Beginning with the second payment in 2011, reimbursements are phased out at a rate of 2% of total resources each year • The 2% per year reduction is calculated and applies separately to TPP and Public Utility Personal Property so local jurisdictions could lose up to 4% in any given year until payments cease • The three payments per year under TPP reimbursement are reduced to two, one payment for 1/7 is still made in May with the August and October payments combined in to a single 6/7ths November 20th payment. The treasurer has until December 31 to ensure the payment is received by local jurisdictions. • The Public Utility Personal Property payments are made by February 28th and August 31st of each year. COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  19. TPP & Utility Reimbursement • If in any year the payment is less than 2% of total resources, then no payment is made • In 2013, the budget suspends the phase down of reimbursements for entities that are still receiving reimbursements (essentially any county service function with more than a 6% reliance on either TPP or Utility Personal Property reimbursement). The accelerated phase down may be resumed or changed with next state budget. COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  20. TPP & Utility Reimbursement • Many service functions do not have more than a 6% reliance on either TPP or public utility reimbursement and thus payments will be phased out by CY 2013 • For example, TPP reimbursement will be phased out for all but 6 counties with respect to “other service function” which includes county general fund • For public utility property reimbursement, all but 3 counties will be phased out in “other service function” by CY 2013 COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  21. TPP & Utility Reimbursement • All local governments have until June 20, 2013 to make sure that the classification and amount of reimbursement payments are accurate before TPP and Public Utility payments become final. • If you have concerns or questions regarding any property tax levy listed on the Department of Taxation website, please email: TPP@tax.state.oh.us • For additional data, please use the following link to the Department website: http://tax.ohio.gov/channels/government/phase out.stm COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  22. Casino Revenue COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  23. Casino Revenue Counties receive 51% of “gross casino revenue” • As appropriated by HB 156 • Calendar year 2012 -- $44 million • January-June 2013 -- $69 million • If Video Lottery Terminals (VLTs) – reduce by 27% • Calendar year 2012 -- $32 million • January-June 2013 -- $49 million • Dept of Taxation’s (TAX) October 2009 report on the casino ballot issue (p.11-12) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  24. Casino Revenue - Assumptions • TAX’s Distribution: • CY 2012 – April, July, and October distribution • Jan-June 2013 – January and April distribution • Distributions are for the 3 previous months • Casinos begin operation: • Toledo & Cleveland – March 2012 • Cincinnati & Columbus – February 2013 • TAX’s estimates regarding operating capacity COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  25. Casino Revenue – Distributions • County Share shown on chart • Takes TAX’s estimated amount disbursed from Fund 5JG0 – Gross Casino Revenue County Fund • Divides total by Ohio 2010 census population • Multiplies by each county’s 2010 population • Reduces the 8 largest counties by 50% • If largest city in the county has a population in excess of 80,000 that city receives one-half of that county’s allocation COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  26. Other Highlights General Government and Operations Health and Human Services Jobs, Economic Development, and Infrastructure Public Safety and Criminal Justice Agriculture and Rural Affairs Taxation and Finance COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  27. General Government and Operations State Health Care Pool Self-Insurance Programs Wellness County Recorder Training Public Record Retention and Lawsuit Reform COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  28. State Health Care Pool ORC Sections 9.901; 305.171 To be mandatory, or not to be mandatory? • Charts a path DAS must take in exploring and possible creating pools. • DAS has authority to make pools mandatory should they be established. Exemptions from Hypothetically Mandatory Pools: • Self-insured entities w/TBD “best practices” • Consortiums w/TBD “best practices” • A “more financially advantageous” alternative (p.25-26) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  29. Self- Insurance Programs ORC Section 9.833 Public Individual SI employers no longer exempt from: • Evaluation by a certified actuary • Reserving funds as actuarially deemed necessary; and reporting annually to AOS. • Establishing a special fund for reserves by resolution New for Everyone: • Requirement for certified audited financial statement • Contract with a CPA for preparation of written evaluations (p.26) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  30. Wellness ORC Section 3901.56 Insurers, including “public employee benefit plans,” now explicitly authorized to offer a wellness or health improvement program that provides rewards or incentives to encourage participation. Note: CCAO still pursing wellness and Sec 125 authority under ORC Sec 305.171 in HB 225 to clarify authority to make programs eligible for fringe benefits. (p.27) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  31. County Recorder Training • Join Sheriff, Auditors, Coroners, Treasurers (Engineer, Prosecutors, and Judges) • 8 Hours of continuing education approved by the Ohio Recorders’ Association • Newly Elected-15 hours in 1st year, 8 hours each subsequent. • Commissioners shall approve reasonable amount for registration fees, lodging and meal expenses, travel expenses. • Non-compliance= “Failure to complete” notice (for informational purposes only). (p. 27) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  32. Public Record Retention and Lawsuit Reform • RC-2’s dictate when to send OHS an RC-3 • AG can train on retention schedule • Limits cumulative total amount for wrongful destruction suit to $10K • Attorney Fees limited to $10K • “First Past the Post” provision. • 5 Year Statute of Limitations • No recovery if request was a pretext (p. 28) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  33. State Government Re-Organization Plan DAS to develop recommendations. Report by January 1, 2012 (p.29) • Ohio Constitutional Modernization Commission • Commission authorized by Speaker Batchelder Bill (HB 188) • Budget provides $50K a year for the operation of the Commission • a preparatory body to determine whether a convention should one be called • a revisory body to advise the legislature with respect to needed changes. Commission will consist of 32 members, 3appointed by each caucus leader of each chamber, the 12 members then appointing an additional 20 members (p.29) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  34. Health and Human Services County JFS, CSEA, and Children Services GRF County TANF Allocations Developmental Disabilities Behavioral Health County Homes HHS- On the Horizon COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  35. Health and Human Services County JFS, CSEA and Children Services GRF • Across-the-board 10% GRF cut: ok, but for • Adoption Assistance • Cost shift of $7M! – averted during deliberations • Child Support Enforcement • Proposed 15% state GRF cut • Loss of federal incentive match left large $ gap • $15M less local dollars= $45M total loss (counting fed match) • State agreed to invest $7M year for total of $21M w/ fed match. County TANF Allocations • Proposed: $211M/year ($80M/yr, or 28% cut) • Final Result: $ 236M/year (55M/yr, or 19% cut) • Counties under pressure to make work participation rate in FFY12 or risk $$ sanction. (p.33-34) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  36. Developmental Disabilities • County boards received approximately a 30% cut in state subsidies compared to SFY11 levels. COUNTY COMMMISSIONERS ASSOCIATION OF OHIO

  37. Behavioral Health • Medicaid match $$ now provided by state instead of local boards; intent to free up more $$ for non-Medicaid eligible individuals in need. (p.37-38) • Funding *Charts courtesy of OACBHA COUNTY COMMMISSIONERS ASSOCIATION OF OHIO

  38. County Homes • Changes in Long Term Care Funding Several changes under principle of “rebalancing” long term care. Home/Community Care Institution Care +6% in 2013 (42%) -6% in 2013 (58%) • Franchise fee – no change in current status of county homes (despite efforts by some, which will continue.) -Joint Legislative Cmte for Long-Term Services and Supports (p.36) COUNTY COMMMISSIONERS ASSOCIATION OF OHIO

  39. HHS - On the Horizon • Medicaid eligibility determinations and the impact on county human service delivery systems. • Help Me Grow • Funding changes and their impact: • administrative funding • service delivery and eligibility (Part C) • Bureau for Children with Medical Handicaps (BCMH) – proposal to increase county spending likely to continue in the future. COUNTY COMMMISSIONERS ASSOCIATION OF OHIO

  40. Jobs, Economic Development, and Infrastructure Economic Development COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  41. Economic Development • “Invest Ohio” – personal income tax credit • Invest in a “small business enterprise” • employment base of 50 in OH or majority of US employees in OH • business test – less than $50 million in assets or $10 million in sales • Credit is 10% of qualifying investment • $1 million maximum allowable in a biennium • Program Extensions: • Job Retention Tax Credit – December 2013 • $20 million payroll / $5 million capital investment • Incumbent Worker Training • $6,000 per year / 33% employer or employee paid • Rapid Outreach Grants • Infrastructure improvements by political subdivisions • Enterprise Zone Extension – Oct 15, 2012 (p.40-41) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  42. Economic Development • Regional Transit Authority membership • Political subdivision membership in certain RTAs • RTA must levy property tax and include county of at least 400,000 population • Ballot issue by November 5, 2013 • Question of joining or leaving • Action effective 6 months after certification of ballot issue • Study - expansion of RTA outside its territorial boundaries • Conducted by Ohio Public Transit Authority • Must consult with CCAO, OML, and OTA • Report due to GA and Governor by December 31, 2011 (p. COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  43. Prevailing Wage • State Projects exempted from prevailing wage: • Job Ready Sites program • Ohio Rail Development Commission • Energy resource development projects • Projects receiving funding from DOD • ORC Chapters 122, 165, or 166 (p.39) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  44. E-Check – June 2017 • County sewer district – transfer of assets to a municipality by mutual agreement • Any part of water supply or sanitary facilities that are connected to the municipality's facilities • Water supply or sanitary facilities that are located within the district and within or annexed to the municipal corporation • Ohio Housing Study Committee • 7 Members - Auditor, Directors of Commerce, Development, 2 House/ 2 Senate members • Report by March 31, 2012 • Purpose – review policies, programs, and partnerships of Ohio Housing Finance Agency (OHFA) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  45. Public Safety and Criminal Justice Indigent Defense Community Corrections Act Funding DRC Reorganization and HB 86 – Sentencing Reform COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  46. Indigent Defense • Biennium reimbursement rate of 35% • “Cost” to counties: • $74.8 million in FY ‘11 • $83.9 million in FY ’12 • $86.8 million in FY ‘13 • State GRF contribution: • $12.6 million in FY ’11 – 31% • $3.0 million in FY ’12 – 7% • $3.6 million in FY ’13 – 8% • Reliance on Indigent Defense Support Fund (p.47) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  47. Community Corrections Act Funding • Prison diversion – 407 line item – up $3.4 million • Increased from $22.4 to $25.8 million each year • Jail diversion – 408 line item – up $3.6 million • Increased from $11.3 to $14.9 million each year • Net gain in CCA funding = $7 million per year (p.48) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  48. Community Corrections Act Funding • Where is it going???? • Elimination of APA staff to assist with pre-sentence investigation and report writing • $1.3 million per year to common pleas courts • “Justice Reinvestment” initiatives • Probation Improvement Grant • Probation Incentive Grant COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  49. DRC Reorganization andHB 86 – Sentencing Reform • APA presentence activities - 48 counties • Bureau of Adult Detention eliminated • Jail inspection program lost – now self-report • New requirements for probation departments • Non-violent F4s and 5s – no longer to prison • Protection to keep them out of jail • Infrastructure for community based corrections (p.48-49) COUNTY COMMISSIONERS ASSOCIATION OF OHIO

  50. DYS funding • RECLAIM - $30 million per year • Youth Services Grants - $16.7 million per year • Corrections Commission membership • Township/municipal joint police districts • Commission on Dispute Resolution abolished • Disposal of forfeited firearms/ordnance • Sheriff can sell to licensed firearms dealer COUNTY COMMISSIONERS ASSOCIATION OF OHIO

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