Where Your Tax $$$'s Are Used in the Toledo Metropolitan Area?

Citizen Auditor, Loren Sengstock, has released a per capita analysis report of ten (10) largest communities in the Toledo Metropolitan Area. Mr. Sengstock with 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 can be used by any ‘citizen/taxpayer’ to evaluate and compare the audited financial data of communities in the Toledo Metropolitan Area (TMA) on a per capita (per person) basis. Mr. Sengstock is bringing governmental financial operations down to an individual or a per capita perspective that will further educate and inform any ‘citizen/taxpayer’. The 2018 report is available now at Citizen Auditors of Ohio’s website www.citizenauditorohio.com in the Lucas County, Ohio section.

This specialized report is created by inputting the Governmental Funds data from the audited annual financial reports available 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. That database is then used to generate all the reports graphical presentation(s), which make this a unique and informative report. Governmental Funds are the results of combining the individual General Fund(s), Special Revenue Funds, Debt Service Funds, and Capital Funds (clarification and definition(s) are provided in the report) financial information as 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). [Governmental accounting terms can often be confusing so Mr. Sengstock has provided definitions in the transmittal letter of the report.]

The audited Governmental Funds data for each of the ten (10) largest communities comprising the Toledo Metropolitan Area is combined into a database. You can see this report detail below in Appendix ‘A’-Page 1 …

The following Appendix ‘A’ – Page 3 (per capita database) provides the per capita data 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 and Mr. Sengstock has provided the knowledge and expertise to put it within the grasp of any ‘citizen/taxpayer’ who is curious and looking to be better informed about our governments use of tax dollars. For example, in Appendix ‘A’ – Page 1 above, we quickly find that $508 million tax dollars were collected and $496 million tax dollars were spent on providing for the public health, safety, and general welfare of the 406,427 persons living within the 10 largest communities in the Toledo Metropolitan Area and those same communities have $243 million tax dollars in carryover/savings; which represents 49% of annual expenditures. We also find that 46.1% of every tax dollars was spent providing for ‘Public Safety’ for commonly known as police, fire, emergency medical services, and dispatching services; further that 15.3% 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 per capita information provided is the average per capita total taxes and other revenues collected in 2018 is $1,249 and the average per capita expenditures is $1,221. Does that mean on average that communities spent $29 less per person than they received in revenues? Yes, it does, as a matter of fact; that shed a favorable light on most communities; however, the communities of Sylvania, Oregon, and Northwood had a negative change in fund balance which means they spent more than available. Deficit spending could be due solely to large capital outlays for a year now and then, making it understandable and often unavoidable to maintain a positive change in funds balance. It should be noted that annual deficit spending in governmental operations year-after-year is avoidable with prudent financial planning and can also be indications of uncontrolled and therefore unsustainable spending which can result in fiscal crisis and regretfully fiscal emergency status being declared by the State Auditor, as far too many communities in Ohio have learned.

The reader can quickly determine how their own community is prioritizing the 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) and more importantly how each community compares to the other communities. After looking at Appendix ‘B’ – Page 2 (see below) you will know how your community fares in the TMA. This information can provide many questions to ask of their elected representatives and any appointed departmental director’s such as ‘Why is Maumee spending highest amount of all the communities on Public Safety and Debt Service?’. Our elected representatives can become more accountable to the elector’s when the ‘citizen/taxpayers’ are informed and armed with the financial ‘facts’; it is the ultimate 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 in this report also has a revenue and expenditures graphical analysis compared to the Toledo Metropolitan average. The following is an example of the City of Maumee’s revenues and expenditures by program group(s). It shows where the Mayor and City Councils spending priorities are and how they compare to the TMA averages:

Another example found in the report is Appendix ‘A’ – Page 10 (see below) that shows which communities in the Toledo Metropolitan Area are collecting the highest to lowest amounts in combined per capita income taxes and property taxes. The combined average per capita for income taxes and property taxes collected is $772 which represents 61.7% of all revenue sources. The highest amount is in the City of Maumee $1,314, followed next by the City of Oregon $1,255, and the City of Northwood has the 3rd highest with $1,191. The City of Sylvania collects $663 which is the lowest of the municipal governments. Springfield Township collects the lowest in the metropolitan area at $501 followed by Sylvania Township at $552; which collects property taxes only. It should be noted that Sylvania Township has recently 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 which was also give a property tax abatement in the previous year.

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 shown here will show you that the Village of Ottawa Hills has the highest at 110.221431 mills, followed by Sylvania Township at 92.873037 mills, while the average rate is 81.401571 mills, and Oregon and Northwood have the lowest rates at approximately 68 mills.

Reviewing this report will provide the reader with an informed understanding of the spending priorities of their local municipal government(s). Reducing the financial data to a per capita amount and then comparing that to the average spent, Mr. Sengstock is helping each ‘citizen/taxpayer’ better understand how and on what programs local governments are spending our tax dollars. The report also provides a factual financial basis in determining if our elected representatives are using tax dollars in a cost effective manner? Evaluating the report should generate specific financial questions for the Mayors, Councils, and Administrators regarding their duties/responsibilities in providing for accountability and transparency: Are our elected representatives being good stewards of our tax dollars?

As ‘citizen/taxpayers’ we must educate ourselves to stay informed and better understand our government and its fiscal stewardship. 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’, so be informed or you 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 that it contains. So keep watching for more articles in the future…….

Loren Sengstock, Citizen Auditor

(330) 888-9459

www.citizenauditorohio.com