Where Your Tax $$$'s Are Used in Summit County Cities?

Citizen Auditor, Loren Sengstock, has released a per capita analysis report of all thirteen (13) cities located in Summit County, Ohio. The majority of his career has been spent in government finance and consulting on the implementation of governmental accounting, payroll, utility billing, and income tax administration systems in Ohio and Michigan. He is using his extensive experience in the creation of a unique graphical report that can be used by any ‘citizen/taxpayer’ to evaluate and compare the audited financial data of these cities in Summit County on a per capita (per person) basis. Mr. Sengstock is bringing the governmental financial operations of these cities, at least in Summit County, down to an individual or a per capita perspective. The report is available now at www.citizenauditorohio.com in the Summit County, Ohio section of the website.

The report is created by inputting the Governmental Funds financial information from the audited annual financial reports available from the State of Ohio Auditor website into a database, then dividing the data by the U.S. Census population for each city to arrive at a per capita database on which all the graphical presentations are based. The Governmental Funds that include the General Fund(s), Special Revenue Funds, Debt Service Funds, and Capital Funds (definitions are included in the report) were selected because they represent the combined amounts of revenues, expenditures, and other funding sources and are primarily funded by income taxes, property taxes, and intergovernmental revenue sharing. These funds are used by all local municipal governments to account for such programs as Public Safety (Police, Fire, EMT, Dispatch), General Government (Administrative-Mayor, Council, Finance, Zoning, Building, Engineering, etc), Transportation (roads, sidewalks, etc) , Leisure Time (Parks, Recreation Centers, Fitness & Senior Centers, etc), and Capital Outlay (Capital Asset Projects – Roads, Buildings, Police/Fire Equipment, etc). [Governmental accounting terms can often be confusing so Mr. Sengstock has provided definitions in the transmittal letter of the report.]

The following is a page from the report that shows which city(s) in Summit County are collecting the highest to lowest amounts in per capita income taxes and property taxes when combined. The average is $816 per capita for income taxes and property taxes collected in Summit County and the highest per capita collection in the City of Fairlawn of $1,701, followed by the City of Twinsburg of $1,244, and the City of Hudson is 3rd highest of $1,122.

Investing the time to review and study the entire report will give the reader a more informed understanding regarding the spending priorities of their local municipal governments. By reducing the financial data to a per capita amount and comparing that to the average spent, Mr. Sengstock is helping each ‘citizen/taxpayer’ better understand how local governments are spending our tax dollars. The report also provides a factual financial basis in determining if our elected representatives are using tax dollars in a cost effective manner? Evaluating the report should generate specific financial questions for the Mayors, Councils, and Administrators regarding their responsibilities in providing for accountability and transparency, or whether they are being good stewards with our tax dollars.

Another report example of valuable information is provided on Appendix ‘A’ – Page 3 of the report, in which the average per capita taxes and other revenues collected in 2017 is $1,389 and the average per capita expenditures is $1,600. Does that mean on average each city spent $211 more per person than they received in revenues? Yes, it does, as a matter of fact; only the cities of Stow, Green, and Norton spent less than they received. The following cities that made a valiant attempt to balance their budgets: Barberton, Tallmadge, New Franklin, and Munroe Falls. The remaining cities of Akron, Cuyahoga Falls, Hudson, Twinsburg, Macedonia, and Fairlawn all had substantial deficits in Net Changes in Fund Balances. Deficit spending, due solely to large capital outlays for a year now and then, is understandable. However, repeated deficit spending in governmental operations year-after-year are indications of uncontrolled and therefore unsustainable spending which results in fiscal crisis and regretfully fiscal emergency status being declared by the State Auditor, as far too many communities in Ohio have learned.

The City of Twinsburg (my hometown) for example, has not balanced their budgets for the last five (5) years and from the positive 2017 balance of $1,066 per capita in this report is currently projected in the 2019 Budget to have only $253 per capita remaining in the General Fund on 12/31/2019! Fiscal Caution, Fiscal Watch, and Fiscal Emergency status happens quickly and re-building financial stability requires difficult decisions and sound financial leadership. Recovery from Fiscal Emergency generally requires 5-7 years and ‘citizen/taxpayers’ endure tremendous hardships and lost public safety and other services during that recovery. Twinsburg ‘citizen/taxpayers’ have received multiple alerts from Citizen Auditor, Loren Sengstock for many years. Since Twinsburg is the 2nd highest collector of combined income taxes and property taxes of $1,244 per capita and receives 53% more than the average of $816 in Summit County coupled with obvious spending problems that are unsustainable; There will be immense challenges in securing new tax increases from voters until the Mayor and Council honestly address their unsustainable spending issues created over the last four years. More on this fiscal analysis will be addressed in future articles.

As ‘citizen/taxpayers’ we owe it to ourselves to understand and be informed. This per capita report will certainly make it easier to fulfill that duty.

As the full report clearly states, there is a vast amount of data in this report and it will take many articles to explore it and absorb its information. So keep watching for more articles in the future…….

Loren Sengstock, Citizen Auditor

www.citizenauditorohio.com

(330) 888-9459