MARTINS FERRY - Cities in the Buckeye State today find themselves having to provide more services with fewer dollars, but those in East Ohio hope oil and gas reserves under municipal properties provide a boon to their bottom line.
Meanwhile, in Wheeling, city leaders are scrambling to stop a push by state legislators and Gov. Earl Ray Tomblin to cut $250,000 in gambling money from the city's coffers. If passed, either this year or in a future year, the ramifications could mean fewer city employees, reduced services or both.
In Ohio, cuts in local government funds have effected local cities and villages in recent years, forcing them to find ways to eliminate all but the most necessary spending. These communities previously had some help with finances through dividends they received from Ohio's estate tax, which was eliminated last year.
Photo by Joselyn King
St. Clairsville officials strive to provide the same services to taxpayers while receiving less in local government funds from the state, according to Mayor Robert Vincenzo.
Martins Ferry Mayor Paul Riethmiller said his city received its last estate tax check in December, and did end 2013 in the black.
"Hopefully, we are not going to get cut any more," he said. "Our government funding has been cut the last three years. This will be a tough year, but we're pretty fortunate. We're not in the situation other smaller communities are in where they are turning off street lights. We may be looking into turning off just every other one.
"We're pretty blessed that we've continued to make it. We haven't had to lay anybody off in the past two years I've been mayor, and we're still functioning. But it's a constant battle to keep our head above water."
Already in 2014, extreme winter conditions have forced Martins Ferry to purchase more salt for its roads than was expected, Riethmiller said, and it's likely city council will have to transfer more funds into the street department's budget during the year.
But he also expects Martins Ferry to turn the corner financially in the coming months as a result of the oil and gas industry. The city has signed leases to allow oil companies to drill on city property in the old Memorial Park area, though no wells have been drilled yet.
"We haven't received any royalty checks yet," he said. "Once we get that going then we'll be doing better."
In St. Clairsville, Mayor Robert Vincenzo said the city also has had to adjust to doing more with less funding.
"We don't have a lot of money for the necessary things I'd like to do," he said. "We're still hurting for money, but overall we're managing to get along with what we have.
"These funds are not going to come back. We have to start maintaining and managing with what we have now. We are prioritizing which projects are more important than others."
St. Clairsville is slowly climbing out of debt, Vincenzo said, and he hopes to soon hire employees to replace others lost in recent months through retirement and attrition. The police department has had as few as six officers, and he said he wants to get back to nine officers this year.
"We have to get people back to work," Vincenzo said."We've let things go .... One of our biggest needs is getting our workforce back to where it is normal.
"And equipment deteriorates. We're compiling a list of items to get repaired or replaced. We don't want to get to the point where something is obsolete, and we don't have anything to use."
He said St. Clairsville has had inquiries from oil and gas companies about drilling on its properties, but a bidding process must first occur before any rights are awarded, he said.
On the West Virginia side, one city reports it is doing very well in today's economy.
Benwood Mayor Ed Kuca said his city is planning in 2014 to buy needed equipment and give all employees a raise. He wont say, however, how much that raise might be.
"Lets just say they will be happy with what we have in mind," Kuca said.
Last year, all employees were paid a $500 bonus. They also receive full medical coverage, for which they do not pay a deductible or a premium.
When this year's severe winter hit, Benwood had four plows on the city's streets - including one dump truck, and three pick-up trucks all equipped with blades. Benwood additionally has two salt spreaders, and an ATV that also is equipped with a plow when needed.
"We use them all," Kuca said.
Taxes paid by Benwood's large industrial base make competitive wages, bonuses and equipment purchases possible, according to Kuca.
"They pay the (businesses and occupation) taxes, and it makes it a lot easier for the city financially," he said. "It's what makes the city strong."
In Wheeling, the measure to cut lottery revenue funds is being used as a way to fix the state budget. The proposal would slash a required deposit of gambling revenue in the state Infrastructure Fund from $40 million to $20 million for the next three fiscal years, and also would permanently reduce various other statutorily required distributions of lottery revenue by 15 percent.
These include contributions to various purse and breeder's funds that subsidize the state's dog and thoroughbred racing industries - but also payouts to cities and counties that rely on the money to balance their budgets.
Some state officials believe local governments have essentially been playing with house money under the current distribution structure, and argue it's time for them to share the burden of lean times with state agencies that have absorbed back-to-back 7.5-percent budget cuts.
Wheeling leaders such as City Manager Robert Herron and Mayor Andy McKenzie don't see it that way, however.
"The impact to our budget would be devastating. ... Essential city services and critical infrastructure projects would suffer, while the reduction of pension liabilities would slow dramatically, as well," Herron said.
In Wheeling, the current budget year has been tighter than usual, as the city saw its end-of-year cash carryover plummet from about $1 million at the end of the 2011-12 fiscal year to roughly $250,000 at the close of the 2012-13 budget cycle - the same amount the city expects to lose if the governor's bill becomes law.
And since 2000, lottery revenue has enabled Wheeling to take a sizable chunk out of unfunded liabilities in its police and fire pension funds.
In that time, assets in the fire and police plans have soared from 10 percent and 7 percent of full funding, respectively, to 32 percent and 42 percent as of Dec. 31.
The cut in gambling proceeds would obstruct that progress, officials said.
As a former state senator, McKenzie understands the challenges legislators face in balancing the state's budget. But he pointed out that local governments have far fewer avenues available to generate revenue than the state, even as West Virginia moves to grant its communities more authority over taxes, fees and licensing through home rule.
"I would encourage our legislators and governor to look at other ways to cut the size of government and reduce spending, instead of taking our dollars," McKenzie said.
The legislation is Senate Bill 385.