Tax Data Series

Local Government Funds

State & Local Government Funds
Distributions to Counties and Municipalities, Calendar Year 2010

Approximately $663.5 million was distributed from the local government fund (LGF) and the dealer in intangibles tax (DIT) in 2010, with $52.0 million distributed directly to municipalities levying income taxes and $611.5 million distributed to the 88 county undivided local government funds. The allocation of the total between the municipal and county portions is determined using a statutory formula (Section 5747.50, Ohio Revised Code).

Table LG-1 shows the total revenues received by each county undivided local government fund from both the LGF and DIT. The total amount distributed from the fund in calendar year 2010 was $598.0 million while the DIT amounted to $13.5 million. Thus, the total amount of all county undivided local government funds was $611.5 million. LG-2 shows the amount distributed to each municipality in 2010. Of the $52.0 million total, $48.4 million was distributed to cities and the remainder to villages.

In calendar year 2008, a new funding mechanism was instituted for the state’s LGF.  With this change, the LGF receives a designated percentage of total state General Revenue Fund (GRF) tax revenues. Under prior statutory law, the LGF received a share of specifically designated state tax revenue sources, not total state GRF tax revenues.

During each month of calendar year 2010, the LGF received an amount equal to 3.68 percent of tax revenue received by the state General Revenue Fund during the preceding month. The amount of money deposited in the LGF in a particular month is distributed during that month by the Department of Taxation to both the 88 county undivided local government funds and to the municipalities that qualify for a direct distribution.

In addition to the revenues received from the LGF, each county undivided LGF also received five-eighths of the taxes paid by dealers in intangibles in the county. These combined LGF and DIT revenues were then distributed by county budget commissions to eligible subdivisions within the county (municipalities, townships, park districts, and the county government itself). For the distribution of these funds among the subdivisions, see tables LG-3 and LG-5.

Most recently, the enacted fiscal year 2012-2013 biennial budget (Am. Sub. H.B. 153, 129th General Assembly) made important changes to the LGF.  For the August 2011 through June 2013 period, the budget temporarily replaces the LGF’s “percentage of revenue” funding method. Instead of receiving allocations tied to the amount of GRF tax revenue received each month, the LGF receives a designated percentage of the specific dollar amounts received by the fund during the fiscal year 2011 (July 2010 through June 2011) “base year” period.

In fiscal year 2012, the county undivided local government funds shall also receive a specific dollar amount that partially mitigates that year’s net funding reduction; furthermore, in fiscal years 2012 and 2013 smaller counties shall benefit from a minimum distribution provision.

Beginning in July 2013 the “percentage of revenue” funding approach goes back into effect. In July 2013, a one-time calculation of new funding percentages is to be performed. The new funding percentage shall replace the 3.68 percent rate that was in statute. The new funding percentage will be obtained by dividing fiscal year 2013 LGF deposits by total GRF tax revenues received during fiscal year 2013. 

For a detailed report on the changes to the LGF as enacted by the FY12-13 state operating budget, view this link: http://tax.ohio.gov/channels/government/documents/FY12-13%20LGF%20enacted%20budget%20explanation_final.pdf

Figures shown were compiled from records of the Ohio Department of Taxation.