Archive for Money

What if the Village had a budget surplus?

If the Village of Mariemont had a reliable budget surplus of $500,000 per year, what suggestions might you have to improve the community with this money? Here are some ideas received from Village residents.

  1. Hire a Village Administrator?
  2. Increase the salary of the Council and Mayor?
  3. Put up more stop signs
  4. Contract with a professional tree management consultant?
  5. Development the South 80 into a recreational playground?
  6. Consider definitive proposals to solve Mariemont’s chronic parking problem?
  7. Greater support for the social organizations within the community?
  8. Consider a community center and renovation of the Municipal Building?
  9. Move the tennis courts to permit business development?
  10. Institute a plan to rejuvenate the historic district?
  11. Retain backyard collection of recyclables?
  12. Spruce up Dogwood Park with fountains, bleachers, parking lot?
  13. Further economic development around the Square?
  14. Cut taxes

What would you like to see happen?

Ohio Community Governments Struggle

An opinion piece in the Enquirer on January 9th cut to the crux of the financial problems facing local governments in Ohio. Dusty Rhodes, the Hamilton County Auditor, and Greg Harris, a former Cincinnati councilman, provided the insightful commentary. Both agreed that the State of Ohio has a budget surplus at the expense of local governments.

Mr. Rhodes feels that the current State Administration and a compliant Legislature is encouraging local governments to “tighten our belts” with “shared services” and “conservative government.” He goes on to say, however, that the vast majority of local governments are operating conservatively and have already tightening their belts and sharing services whenever positive.

Mr. Harris contends that in Ohio the operation of local governments is antiquated pointing out that Hamilton County alone has 48 local governments. In 2009, he notes that Hamilton County taxpayers spent $275 million on 48 fully equipped police departments, some of which cover areas less than 1 square mile.  He goes on to say that this overlap of services creates self-defeating jurisdictional issues that are reinforced by the political clout of entrenched power that holds tremendous sway over local elections.

The elimination of estate taxes and certain property taxes will dramatically shrink the revenue streams of all local governments in Ohio. As was pointed out in a November editorial on the blog, the Village of Mariemont during the past ten years collected $3,370,347 in estate taxes and that if there had been no estate tax, the Village would be $2,054,243 in debt at the end of 2012 rather than having $1,316,104 in reserves.

These figures provide a look into the magnitude of the problem and a recent article in the Eastern Hills Journal revealed that recently the Mariemont Council had to approve a $390,000 appropriation to cover its budgetary shortfall in 2013. These numbers bring into stark focus the squandered opportunity to form a JEDZ with Columbia Township and the need for our leaders to become proactive in producing a balanced budget. Shared and consolidated services may become the only option other than higher taxes, which in Mariemont are already some of the highest in Hamilton County.

What’s the Future for Mariemont Finances?

What’s the Future for Mariemont Finances?

“Mayor Policastro said he has never seen such a strong budget as this one over the last 20 years. It is amazing how well we have done in the adversary (sic) climate that we have been up against. Most small municipalities except for Blue Ash and Evendale are having huge problems and we are not.”

Mariemont Budget Hearing Minutes – July 8, 2013

The financial picture for small communities in Ohio has been greatly impacted by state cut-backs, elimination of the estate tax and elimination of personal property tax. Mariemont is no exception and the picture is not as rosy as portrayed by Village leaders.

Over the last ten years, Mariemont spent more money than it received in the General Fund (which pays for Village services) in years 2003, 2004, 2007, 2008 and 2009. The Village Clerk was projecting 2013 to be a deficit year also but the mayor announced a future estate tax receipt of $318,000. If not for estate tax infusions of $1,219,200 in 2005 and $378,668 in 2010, these years and 2013 would have been deficit years as well. The following chart reflects actual figures published by the Village in its annual reports:

Year Receipts Disbursements Net Change to
General Fund
General Fund Reserve
2003 2,855,086 2,954,912 (99,826) 1,632,500
2004 2,672,499 3,160,566 (488,067) 1,144,433
2005 3,673,446 2,973,182 700,594 1,845,028
2006 3,199,006 3,174,256 24,750 1,869,780
2007 3,249,331 3,453,861 (204,530) 1,665,249
2008 2,995,250 3,392,499 (397,249) 1,268,001
2009 3,053,116 3,311,239 (258,123) 1,009,877
2010 3,117,917 3,101,268 16,649 1,026,525
2011 3,091,361 3,013,484 77,877 1,104,000
2012 3,267,644 3,055,981 211,663 1,316,104

Fortunately, General Fund reserves, two years of unusually high estate tax receipts and the temporary infusion of construction worker wages from the Greiwe condominium developments compensated for the deficit spending. However, with the continued revenue cut-backs by the State and the elimination of the estate tax this year, there will be no “white knight” to march in and financially save the Village from deficit spending. Reserves will continue to decline. If the spending is left unaddressed or there are no new revenue streams coming on-board, the Village could face “fiscal emergency” status by the State Auditor in several years.

Over the past ten years, the Village collected $3,370,347 in estate taxes. If there had been no estate tax, the Village would be $2,054,243 in debt at the end of 2012 rather than having $1,316,104 in reserve. This provides a magnitude of the problem and the level of revenue needed to offset the deficit spending coming. So what is going to happen in Mariemont over the next ten years with no estate tax? The income from a Joint Economic Development Zone (JEDZ) partnership with Columbia Township would have been a great start toward a solution. Shared services might also be a way to help reduce costs.

Communities have known for five years the cut-backs were coming and had ample time to plan for adjustments. Although it is late in the game, Village leaders need to start working on how to address the anticipated shortfall. They can no longer ignore the “train barreling down the tracks.”

Mike Lemon