North Canton Braces for State Budget Cuts

When planning for 2012, North Canton city officials anticipated a 20 percent reduction in state funding.

And with Gov. John Kasich’s two-year budget proposal showing a 25 percent cut for next year, it appears the city wasn’t too far off. (The proposal is only a first step in the budget process, but it’s a strong indicator of where cuts likely will fall.)

The Plain Dealer recently reported that local governments and school districts might get nearly $2 billion less in state dollars in 2012 and 2013. The Local Government Fund is cut by $555 million in the $120 billion, two-year budget, which amounts to a 25 percent cut in the first year and a 50 percent cut in the second year.

But planning ahead will alleviate some of the burden on the city, said V. Margaret Loretto, interim finance director. She said it was important the city assess the economic climate and anticipate those cuts so they didn’t plan to spend money that wasn’t there.

“I said it was inevitable that it was coming,” Loretto said.

Still, officials must look at how they can cut an extra 5 percent out of the city’s budget. And for some municipalities that didn’t plan for the cuts, it’s going to hurt a lot more.

“I think it’s very unfortunate because (for) so many small subdivisions, that’s either their major or their secondary source of income,” she said. “I understand the state has problems, but boy, they’re creating a lot of additional problems for a lot of subdivisions.”

The city also is looking at a 50 percent cut the following year, 2013. That’s going to have the biggest impact, Loretto said. She said the city got $592,00 from the local government fund last year. Cut 20 percent from that and North Canton will see a loss of $121,000, she said.

The city’s been on the rebound from a hit in 2007, when the Hoover plant closed its doors and the city’s income tax revenue fell sharply. Nearly 2,400 people worked there at that time.

Loretto said the city has done a great job in bringing in new jobs to the old Hoover plant (they’re now up to about 500), and the city’s income tax revenue is going up.

“Our income tax (revenue) so far this year is up about $250,000 over last year, same time frame,” she said. “Will it carry through the whole year? We don’t know.”

Another reason North Canton is in fairly good shape to face 2012 is because the city has kept an eye on the number of its employees, consolidating work or not hiring when it wasn’t absolutely necessary.

The city had 95 full-time employees in January of this year, which is 23 fewer than it had in 2007.

“That’s one of the reasons we’re ahead of the game,” she said.