City of Circleville 2025 Budget revealed

The fiscal year for the City of Circleville ends each year on December 31, so even though it’s six months away from the start of the 2025 Fiscal Year, Mark Bidwell, City Auditor, and the City Council’s Finance Committee have already been at work preparing the 2025 budget which will forecast revenue and spending for 2025.

At last week’s meeting, an ordinance was presented for its first reading that would adopt the budget thus far prepared to be the official budget. The Finance Committee’s Chair is Katie Logan Hedges, and includes members Tom Duvall, and Jeff Hallinin. Barry Keller, President of City Council, and all of the other members were also in attendance.

This was the first look at what the finances for the city would look like in 2025 when the previous temporary 0.5% safety forces levy will expire on December 31, 2024. The rules covering municipal accounting do not allow a city to prepare a budget for the following year based on what might happen.

Only those revenue sources that are secure at the time of preparation of the budget for the next year can be used. Not only is this required by the regulations, but it is also good common sense.

No city should be allowed to prepare a budget for next year’s spending that would rely on the belief that a source of revenue will be renewed or created.

On November 5, 2019, the voters in Circleville passed a new 0.5% special safety forces levy that increased the total rate to 2.5%. The vote was 1,358 (61.9%) in favor, 836 (38.10%) against. The levy was implemented on January 1, 2020 as a temporary levy for 5 years, to expire on December 31, 2024. For all of 2024, the City’s income tax is and will be 2.5%. It is paid by those who work in Circleville.

The detailed explanation above is provided as background to understanding the language that was used on the ballot on March 19, 2024 when a 0.4% “replacement” levy failed by a vote of 1,249 (49.0%) in favor, 1,300 (51.0% against), defeated by only 51 votes.

That ballot language is specified by the Office of the Ohio Secretary of State. From their perspective, the proposed 0.4% levy was not a “replacement.” Their view is that the 0.5% levy passed in 2019 is expiring and, therefore, will be dead. Their view is that the 0.4% levy on the ballot on March 19, 2024 (also a temporary levy for 5 years) would have been a new tax, even though the taxpayers would have seen their overall rate reduced from 2.5% to 2.4%.

This helps explain the language used on the March 19, 2024 ballot:

“Shall the Ordinance providing for a 0.4 percent levy on income for operating and maintaining the safety forces for 5 years commencing on January 1, 2025 and expiring on December 31st, 2029, be passed?”

The language was confusing to many in the financial community. Bidwell explained that Moody’s bond rating service called his office and inquired why the tax increase was needed. Officials at the Regional Income Tax Agency (RITA) called to confirm that the new rate would be 2.9%.

The General Fund for the City of Circleville as of December 31, 2023 held a surplus of $3.8 Million. This surplus was accumulated over many years in the past when actual expenses were less than budgeted expenses in the General Fund. When actual spending is less than budgeted, that is good. The estimated surplus as of December 31, 2024 is budgeted to be $2.9 Million. But this number could be higher if, as before, the actual spending is less than the budgeted spending in 2024. That number will not be exact until December 31, 2024.

This surplus of $2.9 Million, also called the “Rainy Day Fund” by many on Council, will allow the 2025 Budget to maintain all of the services that the citizens of Circleivlle enjoyed in 2024. Even if a “new” 0.4% safety forces levy is not in place on January 1, 2025, there will be no cuts needed in 2025 because of the Rainy Day Fund.

However, when the budgeting is done in June 2025 for the 2026 fiscal year, there will be no more Rainy Day fund if the “new” 0.4% safety forces levy is not there to “replace” the previous 0.5% levy. This indicates that there could be budget and service cuts beginning January 1, 2026.