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. ~ '~' f1~t#~ >a~ ~.ax#~ (~Ims#.e~ OHIO 44070 OFFICE OF FINANCE DIRECTOR W. L GERLACH FINANCE DIRECTOR September 2, 1977 FROM: W. L. Gerlach T0: City Officials SUBJECT: LOCAL GOVERNMENT FUNDS ALLOCATION ~~_ ~~~ Each year, as you know, part of the sales tax collected by the State is put into a Local Government Fund to be distributed by the Budget Commission to cities on the basis of "need". Nobody has ever been able to distinguish "needs" from "wants" and this has led to yearly litigation and appeals to the Ohio Board of Tax Appeals and even to the Ohio Supreme Court, with the result that these badly needed funds have been delayed for years. (We have just received the balance of the 1975 allocation - 1976 and 1977 are still tied up). In an effort to avoid this litigation and speed up the receipt of money the County Budget Commission has developed a "need" formula that they would like the cities to ratify. Briefly the formula establishes a minimum allocation for each city based on the previous three years actual allocations. The rema.ilider in the fund is then allocated according to four "need" factors: 1. Assessed valuation per capita 2. Per capita income 3. Population density 4. Number of welfare recipients Based on these factors, North Olmsted is more "needy" than surrounding cities, and the proposed formula works to our advantage. -I expect we --- will receive about $37,000 more in 1978 than we received in 1977 ($32,000 is due to the fact that the amount to be distributed is larger than in 1977, and $5,000 is due to the new formula). I believe that adopting the formula would be advantageous to North Olmsted and I recommend that it be adopted. The Mayor agrees. We were not given much time to act. It should be put on first reading on September 6th and adopted on September 20th.