Mayor Discusses State Budget Cuts

Lakewood Mayor said he expected deep budget cuts last week out of Columbus. He has served in for just four months, yes, but he has lived in this city almost all his life. By this point, he has a good idea about what will happen. And besides, so many lobbyists had told him to expect those state budget cuts. They were inevitable, they said. They were coming.

But Summers never expected what came across his desk late Thursday afternoon.

The Ohio House approved a two-year state budget earlier that afternoon that will not raise taxes, but will cut funding for schools, Medicaid providers, state agencies and, key for Summers and the city, local government. 

What will that mean for Lakewood? Reductions of about $1.6 million in funds allocated to the city government, about $200,000 in commercial activity tax, about $2 million in estate tax -- and perhaps 20 or more positions cut from the city staff.

“It is a huge number,” Summers said. “The House version of the budget gave us no relief, unfortunately.”

Lobbyists anticipated cuts of about 20 percent, Summers said. Instead, the cuts came in around 50 percent, which “really caught everybody at our level by surprise, and not just here in Lakewood.”

Summers during recent weeks and months in advance of the official announcement last week. The city instituted a hiring freeze on all positions in March and Summers said he and his staff have been studying any revenue source -- from fees and permits to citations -- that can bump up the local budget without raising taxes. He also said he wants to avoid layoffs and opt rather for city employees to retire when eligible.

According to various reports, lawmakers hope that revenue estimates will improve next month, which could allow some of the cuts to be lessened. State tax receipts last month were about $214 million ahead of projections according to preliminary numbers, and the state is about $841 million ahead of its tax revenue from last year.

No matter whether that relief arrives, Lakewood will move forward.

Summers said the main internal subjects are local income tax revenues for 2011 and 2012, which are slightly higher this year than last year and could help offset some reductions, and property tax receipts, which have been depressed the last three years.

“The final budget will be decided by June 30,” Summers said, “so in August, we’ll know how much local revenue we’ve lost from the state of Ohio, we’ll have a good idea of what our property tax receipts are, we’ll know pretty precisely what our income tax receipts are, and we’ll be able to identify how much cost reduction we’ll have to do.”

“We’re beginning to anticipate that that’s going to be a pretty big number, and we’re working hard to lay the groundwork for cost-reduction conversations here, with the goal of letting attrition be our friend. That’s our goal.”

Lakewood has already cut more than 50 positions across all departments during recent years in order to balance the city budget. That lopped off about $3.7 million. How much more remains to cut?

“This is going to be very challenging,” Summers said. “But we’re committed.”