Tax Data Series

Local Government Funds

State & Local Government Funds
Distributions to Counties and Municipalities, Calendar Year 2002

Ohio’s Local Government Fund (LGF) is composed of 4.2% of the revenue from state sales tax, use tax, personal income tax, public utility tax, and corporate franchise tax. In calendar year 2002, the fund received revenue from the five tax sources as follows: $334.9 million from the personal income tax, $263.6 million from sales & use taxes, $41.5 million from the corporate franchise tax, and $32.1 million from the public utility excise tax.

In fiscal years 2002 and 2003, the state budget bill (House Bill 94) temporarily suspended the statutory allocation formula to counties and municipalities beginning with the July 2001 distributions. From January 2002 through December 2002, each county and municipality received the same amount it received in January 2001 through December 2001, except for reductions to the March 2002 distribution ($5.5 million) and the July 2002 distribution ($29.3 million) to ensure that no more was distributed in fiscal year 2002 than would have been distributed had percentage based (4.2%) funding been in effect.

In addition to the revenues received from the local government fund, each county undivided local government fund also received five-eighths of the taxes paid by dealers in intangibles in the county.

Approximately $681.6 million was distributed from the LGF and the dealer in intangibles tax in 2002, with $59.0 million distributed directly to municipalities levying income taxes and $622.6 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).

The amount allocated to each county undivided local government fund from the LGF is determined according to a complex statutory formula (Section 5747.501, Ohio Revised Code). The amount allocated to each municipality which levies an income tax is determined in proportion to its share of all municipal income tax collections in the state (Section 5747.50, Ohio Revised Code).

The combined local government fund and dealer in intangibles tax revenues are 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.

Table LG-1 shows the total revenues received by each county undivided local government fund from both the LGF and the tax on dealers in intangibles. The total amount distributed from the fund in calendar year 2002 was $611.3 million while the tax on dealers in intangibles amounted to $11.2 million. Thus, the total amount of all county undivided local government funds was $622.6 million. Table LG-2 shows the amount distributed to each municipality in 2002 based on its income tax collections in 2000. Of the $59.0 million total, $54.9 million was distributed to cities and the remainder to villages.

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