Fiscal stress rising among local governments

The finances of Ohio’s city and county governments are becoming increasingly wobbly, according to a report issued Tuesday by state Auditor Dave Yost.

The auditor’s Financial Health Indicators for 2016 show that nearly two-thirds of Ohio’s 88 counties saw an increase in the number of financial warning signs that they face since the first such analysis was done using 2015 data.

Of Ohio’s 247 cities, 111 — or 45 percent — saw deterioration among such indicators as spending that exceeded annual revenue and the percentage of revenue used to pay debt.

“Overall, we’re seeing slightly more stress on

Ohio’s cities and counties,” Yost said.

The news comes during an era when the General Assembly has slashed funds flowing to local governments almost in half since 2008, to just $382 million. The Democratic candidates running for governor are making the cuts into a campaign issue.

But Yost, a Republican candidate for attorney general, said there are some important caveats in the numbers.

One is that this year’s analysis used a different way of accounting for pension liabilities, increasing the warning signs faced by local government by an unknown amount, he said.

Also, some local governments have been more dependent than others on state funds.

“It really depends on which one you’re talking about,” he said. “But clearly, everyone has had some belttightening to do.”

The only county determined to be in distress was Morgan County in eastern Ohio. Seven cities also shared that distinction: Akron, Canton, East Cleveland, Girard, Lorain, Maple Heights and Norwood.

A number of cities and counties, including Cincinnati and Youngstown, could be headed toward financial distress, according to the analysis, which shows central Ohio doing relatively well compared with much of the rest of the state.

Yost said the point of the exercise is to allow local governments to make course corrections while they’re still relatively painless.

“It’s like being on the freeway and you have to cut across three lanes of traffic a quarter-mile out. That’s a difficult and dangerous thing to do,” Yost said. “If you start to adjust 3 miles out, you barely have to touch the steering wheel.”