Where Are Your 2022 Tax Dollars Spent in the Toledo Metropolitan Area?

Citizen Auditor, Loren Sengstock, has released a per capita analysis report for 2022 of the ten (10) largest communities in the Toledo Metropolitan Area (TMA). Mr. Sengstock’s considerable experience and insights into government finance and consulting on the implementation of governmental accounting, payroll, utility billing, and income tax administration systems in Ohio and Michigan have provided him with a genuine ‘citizen/taxpayer’ perspective on presenting his analysis of governmental financial reports. He is using that extensive experience in the creation of a unique graphical report that any ‘citizen/taxpayer’ can evaluate by comparing the audited financial data of communities in the TMA on a per capita (per person) basis. Mr. Sengstock is bringing governmental financial operations down to an individual (per capita) perspective to educate and inform the average ‘citizen/taxpayer’ in the often complex and misunderstood area of governmental financial reporting. The 2022 report is available now at Citizen Auditors of Ohio’s website www.citizenauditorohio.com within the Lucas County, Ohio section.

This specialized report is created by taking the annual audited financial data of the Governmental Funds reported at the State of Ohio Auditor website; then dividing that data by the U.S. Census population for each community, resulting in the per capita database. The property tax rate information is obtained from the Lucas and Wood County websites. The combined database is then used to generate all the report graphical presentation(s), which make this a unique and informative report.

Governmental Funds are the results of combining the General Fund(s), Special Revenue Funds, Debt Service Funds, and Capital Funds (further clarification and definitions are provided in the report) financial data into a single category as defined and required by the Government Accounting Standards Board (GASB). Governmental Funds therefore are the results of the combination of revenues (primarily sources are income taxes, property taxes, and intergovernmental revenue sharing), expenditures (by programs such as Public Safety, Public Service, General Government, etc), and other funding sources (includes Debt Issuances, Interfund Transfers, etc.); which are used by all local governments to account for program expenditure categories such as Public Safety (Police, Fire, EMT, Dispatch), General Government (Administrative-Mayor, Council, Finance, Zoning, Building, Engineering, etc), Transportation (roads, sidewalks, etc) , Leisure Time (Parks, Recreation Centers, Fitness & Senior Centers, etc), and Capital Outlay (Capital Asset Projects – Roads, Buildings, Police/Fire Equipment, etc). Government accounting terms can often be confusing and unfamiliar to the average ‘taxpayer/citizen’, so Mr. Sengstock has provided expanded definitions in the transmittal letter of the report.

The following chart (Appendix ‘A’ – Page 13) is a table providing in one page, the revenue sources and expenditure programs ranked from highest to lowest in each category by community. This table is a unique means not reported anywhere else in Ohio to our knowledge. . .

The audited Governmental Funds data for each of the ten (10) largest communities in the TMA are combined in a spreadsheet database, as seen here in Appendix ‘A’-Page 1 …

The following Appendix ‘A’ – Page 3 (per capita database) is the results of dividing each communities’ financial performance by their population which provides the per capita calculations which are used to create the individual community graphical reports in Appendix ‘B’; that compares each communities per capita revenues and expenditures compared with the TMA averages.

This single page of the report contains financial information not readily available without extensive research and understanding of governmental fund accounting principles; Mr. Sengstock has provided the knowledge and expertise to put it within the grasp of any ‘citizen/taxpayer’ who is curious and wanting to be more informed about our governments use of our tax dollars. For example, in Appendix ‘A’ – Page 1 above, we quickly find that $671 + million tax dollars were collected and $662+ million tax dollars were spent on providing for the public health, safety, and general welfare of the 421,822 persons living within the 10 largest communities in the TMA and they have $431 million tax dollars in carryover/savings; which represents 65% of annual expenditures. We also find in Appendix ‘A’ – Page 3 above that 43.5% of every tax dollar was spent providing for ‘Public Safety’ programs better known as police, fire, emergency medical services, and dispatching services; further that 17.2% is spent on ‘Capital Outlay’ which is the replacement/maintenance of major infrastructure like road, sidewalks, public buildings, public safety/service equipment like police cars, fire engines, rescue squads, and other major capital expenditures for parks, recreations, etc…

Another example of valuable TMA per capita information is the average per capita total of taxes and other revenues collected in 2022 is $1,591 and the average per capita of program expenditures is $1,569. Does that mean on average TMA communities spent $22 less per person than they received in revenues? Yes, it does, as a matter of fact; that sheds a favorable light on most communities known as ‘balancing the book’.

It is noteworthy that in 2022 all of the communities in the TMA, except the City of Maumee and City of Oregon had a positive Net Change in Funds Balance, meaning the majority saved a few dollars for the next year.

Often deficit spending can result when large capital outlays for a year now and then happen, making it understandable and often unavoidable to maintain a positive net change in funds balance. It should also be noted that annual deficit spending in governmental operations year-after-year is avoidable with prudent financial planning; the results of good stewardship of our tax dollars; however, it can also be indications of uncontrolled and therefore unsustainable spending that can result in fiscal crisis that leads regretfully to fiscal emergency status being declared by the State Auditor, as many communities in Ohio have unfortunately learned. For 2022 none of the TMA communities experienced any known fiscal emergency or stress and for that they should be acknowledged.

Taxpayers generally exercise due diligence when making decisions regarding any governmental agencies request for new levies that increase taxes by our elected representatives. The majority of voters of course have the final say in whether or not our government taxing authorities can finalize the proposed capital improvement projects or receive additional operational funding. The people have always controlled the purse strings in America, either thru their elected representatives or rights of decision at the ballot box which fall under the jurisdiction of our Constitutions in the First Principle known as ‘the rule of Law’. The Law governs in America thru our Constitutions, Charters, and the Ohio Revised Code. We the people control our government thru voting for leadership to govern over us and administer the Law as authorized in our founding legal documents. The ‘Rule of Law’ is the heart of American government and the people are the final authority when their voice is heard by voting; Thomas Jefferson was fond of saying ‘In a republic we elect the government we deserve’.

The reader can quickly determine how their own community is prioritizing their spending of tax dollars on public safety, transportation, general government (administration), community development, leisure time activities (parks), public health (Lucas county health dept), and debt service (principal and interest on public debts). This report provides a convenient means of evaluating how their home community compares to the other communities in the TMA. After looking at Appendix ‘B’ – Page 2 (see below) you will know how your community fares and is provided for all the TMA communities included in this report. The information provided can lead to questions to ask of your elected representatives and appointed departmental directors such as; ‘Why is Maumee spending the highest amount of all the communities on Public Safety, General Government, and Transportation?’ Our elected representatives will become more accountable to the elector’s when the ‘citizen/taxpayers’ are informed and armed with the financial ‘facts’. It is the ultimate provision for checks and balances on those elected or appointed to represent us in providing for everyone’s public health, safety, and general welfare – the major purpose and objective of our government.

Each community included in this report also has similar revenue and expenditures graphical analysis in Appendix ‘B’ including a comparison to the TMA averages. The following example is the City of Maumee’s revenues and expenditures by program group(s). It indicates where the Mayor and City Councils spending priorities are in comparison to the TMA averages:

Another example found in the report is Appendix ‘A’ – Page 10 (see below); it shows which communities in the TMA are collecting the highest to lowest amounts in combined per capita income and property taxes. The combined average per capita for income and property taxes collected is $983 which represents 61.8% of all revenue sources. The highest amount found in the City of Rossford at $1,807, followed next by the City of Oregon at $1,690, and the City of Maumee has the 3rd highest at $1,527. The City of Toledo collects $972 which is the lowest of the municipal governments. Springfield Township collects the lowest of the townships at $238 followed by Sylvania Township with $527 (property taxes only). It should be noted that Sylvania Township in 2022 entered into a JEDD (Joint Economic Development District) agreement with the City of Sylvania to share income tax collections generated from a single property near the Sylvania Avenue and Holland-Sylvania Rd area that was also given a property tax abatement in the previous year in an attempt to reduce annexation pressures. The City of Sylvania and Sylvania Township property tax revenues and Public Safety and Leisure Time Activities have been adjusted to reflect the shared costs of fire/EMS services and SAJRD (Sylvania Area Joint Recreation District) cost distributions for comparability to other TMA financial performances.

Did you ever want to know which community in the TMA has the highest effective residential/agricultural property tax rate? Then Appendix ‘A’ – Page 11 (see below) reports that the Village of Ottawa Hills has the highest effective rate of 106.196726 mills, followed by Sylvania Township at 82.819708 mills, with the average rate in Lucas County at 74.412609 mills, and Oregon and Northwood have the lowest rates at approximately 60-61 mills. While Sylvania Township has the 2nd highest property tax rate, it collects the highest property taxes per capita of $572 in Lucas County; due to the total assessed value of property in the township along with its population. It should be noted that Sylvania Township also provides the most cost-effective services in the TMA when compared to the municipalities; how is that possible is a question for another article in the Toledo Patch soon.

Reviewing this report will provide the reader with an informed understanding of the spending priorities of their local government(s). Reducing the financial data to a per capita amount and then comparing that to the averages allows Mr. Sengstock’s report to aide every ‘citizen/taxpayer’ in understanding how and on what programs the TMA local governments are spending their tax dollars. The report also provides a factual financial basis in determining if our elected representatives are using tax dollars in a cost effective and prudent way? Evaluating the report will generate specific financial questions for the elected representatives and Administrators regarding their duties/responsibilities in providing for accountability and transparency of our tax dollars: (1) Are our elected representatives being good stewards of our tax dollars? (2) Why are ‘Capital Outlay’ programs being decreased or increased? Basically, when a program expenditure exceeds 5-10% of TMA averages; questions from the taxpayers is warranted and a further evaluation of the financial performance is justifiable; it is the essence of transparency and accountability to ask questions of our government!

After years of governmental experience, says Mr. Sengstock, he watches ‘Capital Outlay’ expenditures where he often sees some obvious signs of fiscal distress; a major one being current or recurring reductions in ‘Capital Outlay’ for roads, equipment, or other infrastructure; this can be a clear indicator that operational needs (or wants) like wages, benefits, or economic downturns have exceeded estimated or actual revenue collections. After ‘Capital Outlay’ reductions become a trend is when taxpayers begin seeing levy issues on the ballot(s) seeking increased taxes. Increases in taxes are generally warranted if properly documented, credible to the community, and all due diligence in presenting the facts to the people are provided. If the increase in proposed taxes is proven to be the results of fiscal mismanagement or lack of due diligence, the voters will generally become informed and often send the request back for further consideration by the recommending taxing authority. These decisions remain in the hands of the voters as prescribed by our U. S. Constitution, State Constitution, and Laws created by and for ‘We the People’. Voting is the corner stone of our Democratic Republic (representative) form of government and basic to our freedoms.

As ‘citizen/taxpayers’ our duty is to educate ourselves to stay informed and better understand our government; ‘We the people’ remain the ultimate checks and balances on the fiscal stewardship of those we have elected. This per capita report is an excellent first step in fulfilling our duty to be informed and aware of what our government is doing with our tax dollars. Thomas Jefferson was known to have said ‘Information is the currency of democracy’, therefore, we strive to be informed or we run the risk of being short changed!

There is a vast amount of data and information presented in this report and it will take many articles to explore it fully and absorb all of its contents. So keep watching for more articles in the future…….

Loren Sengstock, Citizen Auditor (330) 888-9459 www.citizenauditorohio.com