City battles cuts

The City of Portsmouth continues to battle cuts coming down from the State, cuts which restrict funding needed in order to provide services to city residents and making it difficult to keep a balanced budget.

In the latest of cuts, State legislators reduced funding to the Ohio Department of Rehabilitation and Correction (ODRC), which further reduces their ability to fund probation departments across Ohio. The cut will reduce funding to the Probation Department of the Portsmouth Municipal Court by $140,000. The State’s fiscal year runs July 1 through June 30, creating a loss of $70,000 for the remainder of 2017. Portsmouth City Council has agreed to consider replacing the funds with City money. City Manager Derek Allen has been working with Council to balance the City’s budget after being on fiscal watch status since November 2012.

According to City Auditor Trent Williams, in recent years, the City has lost hundreds of thousands of dollars in cuts to the local government fund as well as in estate tax and personal property tax revenue.

In 2001, the City’s local government fund revenue was more than $1.5 million. Funding was then frozen from 2003 to 2008. Cuts began in 2009. The fund has seen decreases every year since, with significant decreases since 2012. Estimated local government revenue for 2017 is $650,000, an average annual loss of $750,000. Estate Tax Revenue was eliminated in 2014, with some staggering funds continuing. Loss of the estate tax averages $440,000 annually. Personal property tax has also since been phased out, an average annual loss of $200,000.

“The City has counteracted that loss of revenue and other generally declining economic factors with cuts in personnel and spending in addition to voter approved increased income taxes of 0.6% in 2012 and 0.5% in 2016,” Williams explained. “The City also passed ordinances to establish fund balances reserve guidelines over the past two years. Tax increases, personnel and spending cuts and fund balance reserves are all part of the City’s required fiscal recovery plan.”

City income tax revenue has since more than doubled, reaching $5,278,303.18 in 2012 and estimated to hit $11,800,000 for 2017 as tax payers continue to carry the burden.

Allen has confirmed that the City’s budget is balanced with exception to the wastewater fund, which remains in deficit. The Wastewater Fund ended 2016 with a balance of -$1,514,609.40. For month ending April 2017 the fund was at -$1,643,635.22. In order to combat the deficit, the City has raised sewer rates annually. Allen has also asked Council to consider fund transfers and reimbursements for charges that were incorrectly charged to the wastewater fund or could have been charged to another fund. Council is expected to vote on these transfers and reimbursements at the next City Council meeting scheduled for 6 p.m. Monday, September 11. Council meets on the second floor of the municipal building located on Second St. in Portsmouth.

By Nikki Blankenship

[email protected]

Reach Nikki Blankenship at 740-353-3101 ext. 1931.