March 30, 2006

By Robert Mihalek

Village Manager Eric Swansen said last week that a ballot measure aimed at controlling government spending could impede the Village’s ability to complete needed capital projects, and could force the government to reduce staff or services.

The proposal, the Tax Expenditure Limitation (TEL) measure, will appear on the November ballot. The constitutional amendment would limit state and local government spending, including increases in workers’ salaries and allocations for capital projects.

The TEL proposal is backed by a group called Citizens for Tax Reform, which circulated petitions to get the measure on the ballot. The measure is part of Republican Ken Blackwell’s gubernatorial campaign.

In a presentation at Village Council’s March 20 meeting, Swansen said the spending limits would make it “pretty impossible, I think, to do capital improvement projects, at least the big-ticket items.”

Putting off capital projects could cost the Village more money in the long run, he said.

As capital improvements are delayed, Swansen said in a written report on TEL, “the Village runs the risk of increased project costs…higher ongoing maintenance costs…higher financing costs…and risk.”

“Under the measure, the Village may very well be limited in the number and scope of projects that could be accomplished as overall expenditures…are subject to the limitation,” he wrote.

Council member Karen Wintrow said a “huge educational campaign” is needed to inform voters of the ballot issue. “Anything we can do to further that [campaign] would help,” she said.

Swansen told Council members that they could ask staff to prepare a resolution expressing opposition or support for the TEL measure.

The ballot issue would limit annual spending increases by state and local governments — including the Village, Miami Township, the Yellow Springs school district and Greene County — to 3.5 percent or the combined change in the consumer price index and the change in population growth, whichever is higher.

To increase their budgets by more than the spending caps, local governments would have to seek approval from voters.

This last requirement is already coming under scrutiny around the state.

The ballot language states that a local government would need the approval of “a majority of electors” to increase the spending caps or create a new tax.

Swansen said that an elector is defined as a person eligible to vote, meaning that in order to increase spending, a local government would need the approval of a majority of registered voters, not just a majority of voters who cast ballots in the election.

According to an analysis by Swansen, there were 3,428 registered voters for the November 2005 election. In order to pass new spending limits, the Village would need the approval of 1,715 of those voters, or 99.7 percent of the villagers who cast ballots in the last election.

The measure would also require the state to increase money allocated to the local government fund. But Swansen warned that “by no means” is the Village guaranteed funding from this state source.

He also cautioned that communities with low voter turnout, which would have more difficulty getting voters to approve spending increases, would be competing with the Village for local government funds.

The TEL measure would affect the Village beyond possible limits on capital spending.

Swansen reported that a third of spending in the general fund this year is going toward personnel services. And spending on personnel, he said, “escalates faster” than the 3.5 percent limit set by TEL.

In his written report, Swansen said the expenditure cap would erode the Village’s ability to provide suitable compensation packages to employees, which would hamper the government’s efforts to attract the “quality and professional workforce needed to provide the services the community has come to expect.”

Further, the TEL amendment could force the Village to reduce staff, “perhaps by eliminating non-essential non-mandated services,” he wrote.

“Clearly this is something that concerns us and affects our bottom line,” Swansen told Council during last week’s meeting.

If voters approve the TEL measure in the Nov. 7 election, Swansen said, the Village’s 2007 budget could be subjected to the proposal’s limitations.

He said Council could pass the 2007 budget before the November election. By approving the budget early, the Village could increase spending by more than 3.5 percent in a push to complete more capital projects.

Contact: rmihalek@ysnews.com