One detail extremely important to Toledoans is whether or not the language would allow the city to transfer funds from the Capital Improvement Plan (CIP) to the General Fund in order to cover their overspending - as in spending more than they take in.
Inquiring minds....guess we'll have to wait for the actual language, but if it would ban such a transfer, expect to see huge pressure from municipalities to defeat the bill.
Rep. Terhar Announces Financial Responsibility in Government Act
COLUMBUS—Rep. Lou Terhar (R- Green Township) announced today that he will soon be introducing legislation, the Financial Responsibility in Government Act, and that he will be seeking co-sponsors during the next ten days.
The proposed legislation will focus on financial requirements that would apply to three main areas:
1. All governmental subdivisions in the state will be required to operate their annual budgets without any deficit spending. The balanced budget requirement applicable to the state under the Ohio Constitution will also be applicable to all of the state’s political subdivisions.
2. Indebtedness undertaken by any political subdivision in Ohio must comply with the total indebtedness restrictions and funding requirements that are applicable to the State of Ohio.
3. All political subdivisions of the State of Ohio that sponsor any type of pension plan must comply with the actuarial requirements that are currently in place for the State of Ohio.
“The bankruptcy of Stockton, California and more recent filing in Detroit serve as reminders that we should not leave Ohio’s political subdivisions open to this type of potential budget crisis in the future. Municipal bankruptcies hurt not only the city, but also negatively affect the economic health of the region. State resources are stretched thin due to new unemployment claims, added health care costs and a whole host of social services. We in the legislature have an obligation to protect our constituents,” said Representative Terhar.
“The state itself is required by the Ohio Constitution to balance its operating budget,” Representative Terhar continued. “It only makes sense that the political subdivisions of the state have balanced budgets as well. Therefore, I will be introducing legislation requiring Ohio’s political subdivisions to balance their budgets in the same manner as the state is required to balance its budget.”
An official bill has yet to be released but is expected to be introduced before the end of the legislative recess.