Where Were Your 2019 Tax Dollars Spent in the Toledo Metro?

Citizen Auditor, Loren Sengstock, has released a per capita analysis report for 2019 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 2019 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 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 2) represents the major tax or other revenue sources and the programs where your tax dollars were spent in the TMA in 2019…….

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 ....

For example, in Appendix ‘A’ – Page 1 above, we quickly find that $539 million tax dollars were collected and $541 million tax dollars were spent on providing for the public health, safety, and general welfare of the 420,053 persons living within the 10 largest communities in the TMA and they have $263 million tax dollars in carryover/savings; which represents 48.6% of annual expenditures. We also find that 46.3% of every tax dollars was spent providing for ‘Public Safety’ for commonly known as police, fire, emergency medical services, and dispatching services; further that 15.4% 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…

The following Appendix ‘A’ – Page 3 (per capita database) provides the per capita calculations used in creating the graphical reports by major accounting groups contained in this specialized report. This single page of the report contains financial information not readily available without extensive research; 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.

Another example of valuable TMA per capita information is the average per capita total of taxes and other revenues collected in 2019 is $1,286 and the average per capita of program expenditures is $1,290. Does that mean on average that communities spent $4 more 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’. The Cities of Sylvania and Oregon did have a small negative change in fund balance; meaning they spent more than collected in 2019. Often deficit spending is the result of large capital outlays for a year now and then, 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. Taxpayers generally exercise due diligence when making decisions regarding new levies that increase taxes requested by our elected representatives. Requests for more taxes can also indicate poor financial stewardship, lack of fiscal restraint, and reckless issuance of un-voted debt. Informed voters generally make informed decisions.

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 and General Government?’ 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 $764 which represents 59.4% of all revenue sources. The highest amount found in the City of Maumee at $1,334, followed next by the City of Northwood at $1,190, and the City of Oregon has the 3rd highest at $1,120. The City of Toledo collects $740 which is the lowest of the municipal governments. Springfield Township collects the lowest of the townships at $224 followed by Sylvania Township with $552 (property taxes only). It should be noted that Sylvania Township in 2020 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.

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 rate of 110.221431 mills, followed by Sylvania Township at 92.823037 mills, with the average rate in Lucas County at 81.401571 mills, and Oregon and Northwood have the lowest rates at approximately 68 mills. While Sylvania Township has the 2nd highest property tax rate, it collects the highest property taxes per capita in Lucas County; due to the total assessed value of property in the township along with its population.

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 Mayors, Councils, 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?

After years of governmental experience, Mr. Sengstock says, 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 and credible or they can be the results of fiscal mismanagement. These decisions remain in the hands of the voters as prescribed by our U. S. Constitution, State Constitution, and Laws created ‘We the People’. Voting is the corner stone of our Republic (representative) form of government and basic to our freedoms. As Thomas Jefferson said ‘We elect the government we deserve’.

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