Frequently Asked Questions (updated 4/12/06)
Printer-friendly version of Overview and FAQ
Q. Does the TEL/TABOR amendment limit the growth of the state budget?
A. Yes. Aggregate state expenditures may only increase from the previous year by the sum of the rate of inflation and the rate of population change. The only exception to this is if the General Assembly passes a specific increase that meets the following four criteria: (1) identifies each line-item excess and the revenue source available to pay for it; (2) limits the “excess” to only the one purpose identified in the bill; (3) receives a three-fifths vote from both the House and the Senate; and (4) if the Governor also signs the measure, it is approved by a majority of the voters at the next statewide election. So, for example, if the state experienced a substantial increase in snowfall from one year to the next (in a fashion that wouldn't qualify as an emergency), and the expenditures for snow removal had to be increased over the rate of inflation and population from the previous year, that money would have to come from some other part of the budget. If there isn't any money available elsewhere in the budget, then the only response would be to increase overall expenditures, which would require a three-fifths vote of the House and Senate and concurrence of the Governor, followed by a trip to the ballot for a vote by the people.
Q. So, if state spending only grows at the rate of inflation but the economy recovers and state revenues grow at a rate greater than inflation, what happens to that additional revenue?
A. The TEL amendment sets up a budget reserve fund. Any additional revenues are placed in the reserve fund. When the fund exceeds 15% of the aggregate state expenditures from the preceding year, the excess money is immediately refunded by the treasurer of state on a pro rata basis to all individuals who paid Ohio income tax in the preceding calendar year.
Q. If the TEL amendment does not eliminate the LLGSF, how will it impact library funding?
A. Because of the other tax and expenditure limitations constitutionally required by this amendment, there simply would not be any money available to fund the LLGSF. It is most likely that the Ohio General Assembly would be forced to eliminate the LLGSF.
Q. Does the TEL amendment address local government funding at all?
A. Yes. The TEL amendment requires that the Ohio General Assembly establish a local government fund for the purpose of providing state funds to political subdivisions of the state. Each fiscal year, the state would have to deposit in that fund five percent (5%) of the aggregate state expenditures. A formula would be developed by the Ohio General Assembly to determine how this money would be distributed to each of the state's 88 counties. The counties would then distribute the money from this fund to each of the political subdivisions in the county, including libraries, cities, townships, villages, schools, police, fire, parks, etc.
Q. Does the TEL amendment restrict growth in library expenditures?
A. Yes. Libraries will not be able to authorize an increase in their “aggregate expenditures” beyond the previous year by more than the rate of inflation and population change EXCEPT by passing a levy or new tax, or increasing the rate of an existing tax. Note that “aggregate expenditures,” when tested at the library level, do not include money received from the state or federal governments or money from gifts/bequests. So, if, miraculously, libraries were allocated more money from the replacement for the LLGSF, or if a library received a large gift, spending all of the increases in that money would not constitute an increase in “aggregate expenditures.” Conversely, since state assistance does not count in calculating aggregate expenditures at the library level, if state assistance decreased, the library could not use other sources of funds to make up for the loss without triggering the “aggregate expenditure” limitation. In effect, at the library level, the restriction means that libraries will not be able to increase their expenditures from non-levy, non-gift, non-state or federal government sources (i.e., fines or services revenue, investment income, or other similar revenue sources).
Q. Would the TEL amendment require public libraries to seek a vote of the people in their service area to increase their spending beyond the rate of inflation and population formula?
A. Yes, if the source of the funds to cover the increase came from something other than federal or state government, tax relief, gift or bequest, or something directly related to an emergency (declared by the Governor). This would mean that grants, fines, funds to replace lost items, fees for services are not revenue that can be included in increasing library aggregate expenditures.
Q. How do public libraries get on the ballot for voter approval to increase their aggregate expenditures beyond the rate of inflation and population formula?
A. There is no language that permits public libraries to go on the ballot except for levies. The OLC will need to attempt to change the Ohio Revised Code.
Q. Does the TEL amendment require anything more than a simple majority vote to pass a local levy or other tax increase?
A. It could.
