Area officials are in the process of developing their budgets for 2013 now that the Local Government Fund allocations have been determined.

The fund, which is revenue from the state, has been reduced for a second time for 2013. The fund is now 50 percent of what the local goverments received in July 2010. Last year, the state decreased LGF by 25 percent but reduced to 15 percent when additional funds were found elsewhere, according to Pete Landrum, assistant Butler County administrator and finance director.

The LGF cuts were made to balance the state’s two-year budget that ends June 30, 2013. In addition, the state has completed its elimination of the personal property tax and will eliminate the estate tax at the end of 2012, which are other revenues that counties, cities and townships received.

Landrum said the county received $4.6 million from LGF in July 2010. In July 2012, the county will receive just under $2.3 million or about 54 percent less than it received two years ago.

Hamilton will be allocated $896,911 for 2013, which is down from the $1.3 million it received a year ago in local government funding, according to the Butler County Auditor’s Office. Two years ago, Hamilton received nearly $1.8 million in local government funding.

Middletown is slated to receive $660,283 in LGF for 2013 from Butler County and another $73,696 in LGF from Warren County. A year ago, it received $123,135 from Warren County and $863,794 from Butler County in its 2012 LGF allocation.

According to the Butler County Auditor’s Office, the 2013 LGF allocations for cities also lists: Oxford receiving $306,799, down from $401,360 in 2012; Monroe receiving $176,893, down from 231,414 in 2012; and Trenton receiving $170,390, down from $222,907 in 2012. Monroe will also be receiving $18,688 in 2013 from Warren County, which is down from $26,600 in 2012.

In its 2011 LGF allocation, Fairfield received $1.24 million. That dropped to $798,363 for 2012 and will be reduced again to $610,267 for 2013.

Mary Hopton, Fairfield’s finance director, said the reduction in revenue has made “a significant impact” on that city’s budget.

“Over the past two years, we’ve lost about $1 million with the loss of personal property taxes, and the ending of the estate tax and the reduced local government funds,” she said. “It’s a hard gap to fill and with property and income taxes down, we’ve gotten hit from all sides.”

Hopton said residents in Fairfield will consider a ballot issue in November to allow a portion of the city’s street and capital improvement funds to be transferred to the General Fund for day-to-day operations “to help cover what the state has taken from us.” As for cuts, Hopton said Fairfield has not discussed the possibility.

“Right now we’re budgeting as if nothing changed other than state funding,” she said.

Hopton said if residents approve the ballot issue, that would change things on the revenue side of the city’s budget.