Ohio Has a Lot of Local Governments. A New Bill Wants Fewer.
Vol. III, No. 266 - House Bill 574 Looks to Shrink Local Governments in Ohio by Paying Them to Consolidate
Ohio has a lot of local governments. The state has 1,308 townships, 673 villages, and 253 cities. Every single one of them has its own government, its own budget, and its own set of responsiblities from everything to keeping the lights on to the roads clear. That’s a lot of governments for one state — and two lawmakers have decided it might just be too many.
Rep. Jack Daniels (R-New Franklin) and Rep. Michael Dovilla (R-Berea) have recently introduced House Bill 574 in the Ohio House of Representatives. The idea behind it is straightforward: if local governments are willing to merge with one another, the state will pay them for doing it. The program — officially called the Political Subdivision Consolidation Incentive Grant Pilot Program — would be run by the Ohio Secretary of State with $25 million set aside to make it happen. Grants are handed out on a first-come, first-served basis, so early movers stand to benefit the most.
The grant formula isn’t complicated, but it rewards communities that take the leap. For cities, villages, and townships that merge, the state multiplies the combined population by $40, then adds 20 percent of the smaller government’s most recent budget — up to a maximum payout of $2.5 million. To put that in plain terms, if a township of 10,000 people merges with a smaller township of 800 people, the newly combined government walks away with at least $512,000. If a city of 50,000 absorbs a village of 3,800, the city hits the $2.5 million cap. Each government can only collect one grant, so there’s no gaming the system by merging in pieces.
Here’s where it gets interesting — and a little urgent. Townships across Ohio face a financial threat that cities and villages simply do not. Unlike cities and villages, which can levy a local income tax to raise money when times get tight, townships rely almost entirely on the property tax. If Ohio eliminates the property tax — a conversation that has grown louder and more serious as 2026 moves forward — townships would lose their main source of income overnight, with nothing waiting to replace it. Roads, fire coverage, snow removal, emergency services — all of it funded by a tax that could one day disappear by a vote in a future referendum.
That’s not a small problem. It’s an existential one. A township that loses its property tax revenue doesn’t just face a budget cut — it faces the question of whether it can function at all. Merging with a neighboring city or village before that moment arrives isn’t giving up. It’s making sure residents still get the services they depend on.
It’s worth being clear about what House Bill 574 actually does — and what it doesn’t. It doesn’t force any government to do anything. Merging two local governments is still a long and complicated process, one that requires voters in every affected community to say yes before anything happens. The bill doesn’t change that process at all. What it does is offer a financial reason to start the conversation — something that, without this bill, might never happen at the township trustee meeting or the village council chambers.
For a township staring down the slow erosion of its tax base, the chance to merge with a neighboring city and receive a meaningful grant for doing so is an option worth understanding. Whether any community actually walks through that door is a decision that belongs entirely to the people who live there.
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