Message to the community from Luren E. Dickinson:
The state budget process continues to move slowly this year, though not as slowly or contentiously as it did two years ago. The Governor originally wanted to cut the state income tax, cut and extend the state sales tax, and work with the federal government on Medicare expansion. The House, however, reduced the income tax cut, eliminated the change in sales tax, and decided against the Medicare deal. The Senate is now examining the budget and will come up with its own version. A finalized budget is required by June 30 unless an extension is approved.
Where do Ohio’s public libraries stand in the biennial budget discussions? Since 2001, libraries have seen only one year of real growth in state support and ten years of stagnancy or decline. Overall, Ohio’s funding of public libraries has dropped by more than 30% in eleven years while inflation has risen by 30%! That is a 60% drop in buying power.
Fortunately, both the Governor’s budget proposal and the House version have increases slated for the Public Library Fund. The projections call for an increase of over 4% in 2014 and about 2.8% in 2015. Compared to past funding years, this puts Shaker Library in the range of 1994/1995 levels; however, because inflation has increased about 60% since that time, we will still see a 60% drop in buying power.
Another factor causing the library to tighten its purse strings is the decline in property valuations that is just hitting the tax rolls this year. It is expected that these revenues will be about 7.5% less than in 2012 and will continue to be flat even if property values increase over time because of an Ohio law, H.B. 120, that was passed 37 years ago.
What is H.B. 120? It is the legal mechanism that freezes property taxes at the dollar amount approved by the voters. Not the millage approved by the voters, but the dollar amount when first calculated. Over time, the effective millage rate (or percent of taxes) declines so that the dollars remain basically the same. Just like with the state funding, there is no growth for inflation.
As an example, the Shaker Heights Public Library has had a 4-mill property tax since 1997. At the time, it was a 5-year levy and would have required new approval every 5 years. But, in 2001, it was replaced by the voters with a continuous 4-mill levy, which never needed to be renewed.
However, with H.B. 920 in place, the effective rate of the 4-mill levy had declined by 2008 to 3.17 mills—a 20% decline in the collection rate. Thanks to the support of our district residents, this continuous levy was “replaced” in the March 2008 and that moved the effective rate of the levy back to 4 mills for 2009.
Unfortunately, property values have declined since that time originally due to the “mortgage meltdown” and more recently because of the county’s triennial valuations. That means Shaker Library is still getting 4 mills, but the dollar amount is much lower—an unintended consequence of the law.
What would happen if property values started going back up and kept increasing? Well, thanks to H.B. 920 the millage rate would continue to be reduced and the Library would never collect much more in dollars than it did in 2009. Nevertheless, despite its funding obstacles, Shaker Library continues to deliver outstanding services!