State Budget Cuts Would Cost City an Estimated $1 Million

Gov. John Kasich's proposed budget would mean about $1 million less in state funding over two years for Strongsville, officials said -- a critical amount for a city already in a deficit-spending situation. 

Strongsville Finance Director Joseph Dubovec said his preliminary calculations indicate the budget proposal would reduce the state's contributions to the local government fund by $450,000 over the two years, and changes in public utility and other tax reimbursements would cost the city another $550,000.

"It looks like it's going to be about $1 million we're losing," Dubovec said.

Because the state's fiscal year starts in July and the city operates on a calendar year, the first impact would be felt here in the second half of 2011, when Strongsville's general fund would take what appears to be a $300,000 hit.

State funding would be down another $500,000 in 2012, with another $200,000 or so lost in 2013.

But those figures are still cloudy. Mayor Tom Perciak said it is unclear whether the cut in local government funds would be 25 percent this year, or 12.5 percent, based on the different fiscal calendars used by the city and state.

"We're still waiting to hear," Perciak said.

Also unknown is the future of the inheritance taxes, which currently add more than $500,000 a year to Strongsville's coffers.

"If we lose that, that's another hole we're going to have to fill," Perciak said.

City officials, predicting state cuts, took some of the revenue loss into account in budgeting this year.

"We did project a little low on the local government funds," Dubovec said.

The local government fund accounts for about 4 percent of the city's $29.7 million general fund.

Still, City Council will have to decide whether to make up the rest of the difference this year by cutting spending or adding to deficit spending. Dubovec estimates this year's deficit at about $2 million.

That deficit will eat away at the city's cash reserves. The projected 2011 year-end carryover balance is down to about $5.4 million, Dubovec said.