Recently a Madison Twp. taxpayer approached me with what he thought may be a silly question.
He asked simply: “Where does the county get its money and what is that money spent on?” I replied that there is no such thing as a silly question when involving taxpayer dollars and proceeded to give him a broad overview of the somewhat confusing topic of county finances. I’d like to share that overview with you today.
Most of Butler County’s operations are funded through the county’s General Fund. The General Fund, overseen by the Board of County Commissioners, pays to operate, at least in part, most county offices including those involved with criminal justice and with administration.
The General Fund budget, which was around $80 million in 2010, receives its funding from many sources, including sales tax (37 percent), real estate taxes (17 percent), and prisoner boarding (8 percent). Other less significant sources include interest income (4 percent), recorder fees (1.7 percent), treasurer fees (1.5 percent), and the local government fund monies sent from the state (5.4 percent), among others.
In an effort to stimulate the rough economy, the Feds have kept interest rates low for the past several years, which has unfortunately had a major negative impact on county budget revenues. In fact, in 2007, interest income was 13 percent of the General Fund budget with $11.8 million in interest revenue, but in 2011, it is expected to be only 3 percent of General Fund budget with just $2.5 million projected.
When hearing news about shortfalls to the county’s budget — and cuts having to be made — one can quickly surmise that plummeting interest income has accounted for a large share of the shortfall over the last five years.
During a poor economy, local governments that somewhat rely on interest income to fund operations will find their suffering exacerbated by low interest rates on their investments. On the flip side, of course, low rates will eventually translate into cheaper borrowing costs for that same government entity, though the benefits have been minimal for Butler County thus far since most county debt is fixed with bonds.
The Board of County Commissioners is responsible for allocating General Fund Revenues to the other independently elected officials to fund their offices. To administrate justice and keep the bad guys behind bars, in 2010, roughly 33 percent of that $80 million went to the sheriff’s office, 20 percent to the courts, and 5 percent to the prosecutor. Other significant consumers of the General Fund for 2010 were debt service at 13 percent, departments under the Board of Commissioners at 13 percent, and the Board of Elections at 3 percent. Combined, the smaller administrative offices of auditor, treasurer and recorder accounted for just 3.4 percent of the General Fund budget in 2010.
Of course, most county office holders have other funds with which to support their operations. These other funds can come from fees, penalties or charges applied for the service provided. For example, the prosecutor and treasurer’s offices both receive 2.5 percent of late payments collected on real estate taxes, which provides funding to collect delinquent taxes. In addition, the Butler County Engineer’s budget comes from several sources, and is almost independent from the General Fund.
As your county treasurer, one of my primary jobs is to collect real estate taxes. For the past couple of years, my office has billed well over $400 million in real estate taxes. However, only around 3 percent of this amount goes to Butler County’s General Fund. Close to 60 percent of the $400 million collected by my office goes to Butler County school districts. Butler County townships receive close to 18 percent and our cities receive just 6 percent of my office’s collections. Agencies like Children’s Services, Developmental Disabilities and Elderly Services are levied separately on tax bills and account for nearly 12 percent of the treasurer’s $400 million in collections.
All operations and allocations are in accordance with the Ohio Revised Code and levies passed by the voting public.
County finances can be rather complex. However, much of Butler County’s financial information can be found on the county’s website at www.butlercountyohio.org under “Commissioners” and then “Office of Management and Budget,” or you can visit the Auditor’s website at www.butlercounty auditor.org to view the county’s Comprehensive Annual Financial Report.
For real estate tax information, you may contact my office at (513) 887-3181. Just remember, there are no dumb questions, and as public servants, it is our duty to provide information and assistance.
Nancy Nix is Butler County treasurer. She is a certified public accountant and is earning a masters in business administration from Miami University. A former Middletown City Council member, she lives there with her husband and three children.
NOTE: This column also appeared in the Hamilton Journal News here.