Ohio s tel tabor closing the door to public libraries
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Ohio’s TEL/TABOR: Closing the Door to Public Libraries?. What is TEL? What is TABOR?. Ohio’s TEL is a state-wide ballot issue to amend the Ohio Constitution Originally planned for November 2005 petition drive by “Citizens for Tax Reform” Certified for the November 2006 ballot

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Ohio’s TEL/TABOR: Closing the Door to Public Libraries?

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Ohio s tel tabor closing the door to public libraries

Ohio’s TEL/TABOR:Closing the Door to Public Libraries?


What is tel what is tabor

What is TEL?What is TABOR?

  • Ohio’s TEL is a state-wide ballot issue to amend the Ohio Constitution

    • Originally planned for November 2005 petition drive by “Citizens for Tax Reform”

    • Certified for the November 2006 ballot

  • Ken Blackwell, Ohio Secretary of State

    • Chair/Spokesperson of “Citizens for Tax Reform”

    • Secretary of State

    • Candidate for Governor


What is tel what is tabor1

What is TEL?What is TABOR?

TEL = Tax Expenditure Limitation

TABOR = TAxpayer Bill Of Rights

Colorado passed its TABOR in 1992

  • What is the same

    • Constitutional Amendment

    • Limits tax expenditures based on formula

    • Requires approval by voters to exceed limits

  • What is the difference

    • Mechanical details and additional restrictions


What s in ohio s tel

Limits state government spending using a formula

Also applies to local governments and public libraries

Requires ballot approval to override limits

Any increase in state taxes requires a ballot referendum

Creates a Budget Reserve Fund for the state’s unspent funds

Earmarks 5% of state funds for local governments

Prohibits unfunded mandates by State Government

Requires a majority of registered voters to approve a local levy

What’s in Ohio’s TEL?


Tel how it works

TEL: How it works

Limits spending increases of tax dollars to 3.5% annually or the sum of inflation plus population change; which ever is higher.

  • Example #1:

    3.40% 2000 CPI-Midwest (Consumer Price Index) inflation rate

    -0.51%2000 population change (down) for Montgomery County

    2.89%

    Limit on tax spending for 2001 would be 3.5% higher than in 2000

  • Example #2:

    3.40% 2000 CPI-Midwest (Consumer Price Index) inflation rate

    0.90%2000 population change (up) for Clermont County

    4.49%

    Limit on tax spending for 2001 would be 4.49% higher than in 2000


Spending limits

Spending Limits

  • Exempt

    • Gifts

    • Grants

    • Federal money

  • Not exempt

    • LLGSF and other local government funds

    • Investment income

    • Overdue book fines and charges

    • Any fees for materials or services


Overriding the limits

Overriding the Limits

  • Voted overrides are required annually to exceed limits

  • Expense of running the elections

    • Election fees – charged against library

    • Advocacy costs – must come from other sources

  • Library Boards cannot place overrides on ballot

    • Taxing Authorities can only place levies

    • Elected Library Boards?


Majority of electors

Majority of Electors?

TEL’s language is mixed. Courts generally interpret mixed language as intentional.

State spending, new taxes and tax increases

“majority of electors voting at such an election…”

Local Government spending, new taxes and tax increases

“majority of electors in that political sub-division…”


Recent voter turnout

Recent Voter Turnout


Ohio s tel tabor closing the door to public libraries

A budget reserve fund (BRF) is created for State of Ohio funding

not required by local governments

Requires annual transfers of funds collected that could not be spent

any unencumbered money in the General Fund

10% of any unencumbered money in other funds

Budget Reserve Fund


Budget reserve fund

Budget Reserve Fund

  • Any time the Budget Reserve Fund exceeds 10% of total expenditures for the previous year the excess money must be refunded on a pro ratabasis to all individuals who paid Ohio income tax in the preceding calendar year.

  • Sales, tax, business, or other taxes and usage fees do not share in the refunds.


New local government fund

New Local Government Fund

  • Currently state funding for local governments and libraries through the local government funds equals about 6.9% of state budget (but expect debate about this)

    • Cities and villages

    • Townships

    • Counties

    • Libraries


New local government fund1

New Local Government Fund

  • TEL earmarks 5% of state expenditures to counties. Funds must be shared by:

    • Cities and villages

    • Townships

    • Counties

    • Libraries

    • School districts

    • Transit authorities

    • MRDD and mentalhealth boards

  • Alcohol and drug addiction services board

  • Soil and water conservation districts

  • Park districts

  • Sewer districts

  • Children services boards

  • Health boards and districts

  • Sanitary districts


Ohio s tel tabor closing the door to public libraries

Source: State of Ohio Budget Highlights, Fiscal Years 2006 and 2007


New local government fund2

New Local Government Fund

  • No guarantee of library specific funding

  • Legislature must decide who gets to decide on how funds are distributed

    • County Commissions?

    • County Budget Commissions?

  • Doesn’t replace LLGSF or the other two local government funds

    • But will there be any money left to fund them?


Other provisions

Other Provisions

  • “…the provisions of this section shall be liberally construed for the purpose of effectuating the purposes thereof.”

  • Supremacy clause, trumping any conflicting provision of the Constitution.

  • Self-executing as opposed to waiting for implementing legislation.

  • Requires General Assembly to repeal any laws that conflict.

  • Gives standing to taxpayers to sue political subdivisions and/or state to force compliance with TABOR.


The impact of tel

The Impact of TEL

  • The “Double Whammy” for local governments and libraries

    • The trickle-down of state cuts to the local level

    • The restrictions on local funding decisions


The impact of tel1

The Impact of TEL

  • Fiscal Management Issues:

    • Capital investments must fit within limits

      • New circulation system or bookmobile?

    • End of year spending up to limit

      • Motivation to spend it now!

    • Timing of override elections?

    • Maintaining multiple accounts:

      • Exempt and non-exempt revenues

      • Exempt and non-exempt expenditures


30 state tax and expenditure limits

30 State Tax and Expenditure Limits

Source: National Conference of State Legislatures, 2005.


Colorado s experience

Colorado’s Experience

  • Funding for higher education dropped by an inflation adjusted 38%. State Ranking for funding of public schools fell to 50th in the country.

  • The percentage of low-income children lacking health insurance in Colorado rose from 15% in 1991-92 to 27% in 2002-03. During the same period, the national proportion of low-income children lacking health insurance fell from 21% to 19%.

  • Reflecting funding cuts, Colorado’s ranking on access to adequate prenatal care dropped from 23rd in 1992 to 48th in 2002. Colorado’s ranking for on-time vaccination of children fell from 20th in 1995 to 50th in 2003.


Colorado s experience1

Colorado’s Experience

  • The percentage of Coloradoans with no health insurance rose from 12.7% in 1992 to 15.6% in 2001, dropping its ranking from 24th to 36th.

  • In 2000-01, Colorado ranked 49th in current expenditures per $1,000 of personal income for public K-12 schools. K-12 education spending per pupil in Colorado fell by more than $300 compared to the national average from 1992 to 2000.

  • Colorado’s ranking for average teacher pay compared to private-sector earnings fell from 30th in 1992 to 50th in 2001.

  • Colorado’s ranking for expenditures on higher education relative to personal income dropped from 35th in 1992 to 48th in 2004.

  • Colorado has no bond rating.


Colorado tabor bad for business

Colorado TABOR:Bad for Business

  • “What the public didn't realize was that [TABOR] would contain the strictest tax and spending limitation of any state in the country, and long-term would hobble us economically.” — Tom Clark, Executive Vice President, Metro Denver Economic Development Corporation

  • “The [TABOR] formula . . . has an insidious effectwhere it shrinks government every year, year after year after year after year; it’s never small enough.” — Brad Young, former Colorado state representative (R) and Chair of the Joint Budget Committee

  • “…no business would survive if it were run like the TABOR faithful say…” — Neil Westergaard, Editor of the Denver Business Journal


Tax lawyers employment tle amendment

Tax Lawyers Employment (TLE) Amendment

Litigation Topics for the Ohio Supreme Court

  • Define what is meant by elector?

  • Define what are encumbered and non-general revenue funds?

  • What is an unfunded mandate?

  • Can a new part of the constitution have precedence over an existing one?

  • Are schools eligible for the new local government fund?

  • How do library boards get elected or on the ballot?

  • Legal claims by local governments against the state

  • Suits by taxpayers against local governments


What we must do

What We Must Do?

  • Treat this like a levy campaign

  • Employ grass roots techniques

    • Speakers bureaus

    • Phone banks

    • Yard signs

    • Literature distribution

  • Personally contribute to supporting organizations to buy television time

  • Thank legislators/leaders who publicly oppose TEL/TABOR.


Grassroots campaign

Grassroots Campaign

  • Communicate with people one-on-one

  • Organize local block-by-block informational “knock and talks”

  • Speak to organizations to which you belong

  • Letters to the editor – especially smaller papers

  • Check in with all of your local government officials

  • Send letters and e-mail to friends


More information on tel tabor

More Information on TEL/TABOR

Citizens for Tax Reform

http://www.repealthetax.com

Bricker and Eckler, LLP

http://www.bricker.com

Ohio Library Council

http://www.olc.org

Policy Matters Ohio

http://policymattersohio.org

Coalition for Ohio’s Future

http://www.ohiosfuture.org

Center on Budget and Policy Priorities

http//www.cbpp.org


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