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Published: Sunday, 8/22/2004

Unions must share the pain

AS MAYOR Jack Ford and City Council struggle with Toledo's difficult fiscal problems, one thing should be clear: Any new money pumped into the city's general fund should not be viewed as a pot of gold for public employee unions to tap, now or in the future.

Not surprisingly, the plan was suggested by the union presidents. But if pain is to be shared over the city's desperate financial situation, unionized police, fire, and refuse workers should not be exempt from the consequences.

This point needs to be made because City Council has put an issue on the Nov. 2 ballot to give city officials greater leeway in deciding how to spend the proceeds from the 0.75 percent payroll tax surcharge, originally approved by voters in 1982 to enhance city services.

Currently, one-third of the revenue raised by the tax surcharge goes to maintain safety forces, one-third to the capital improvements fund for bricks and mortar projects, and one-third to the general fund.

Approval by voters would not increase the income tax but it would allow the city to divert up to half of the capital improvements share to the general fund. That would give the city as much as $8.5 million more a year to help cover a deficit projected at $3.5 million for the final quarter of 2004 and $14 million for all of 2005.

Neither Mayor Ford nor council is touting the proposal as a permanent fix to the budget woes, accentuated by minimal growth over the past five years in revenue from the city's 2.25 percent income tax .

Council leaders say they hope to get away with diverting only $6 million from the capital improvements fund, while the mayor, who favors downsizing city government in conjunction with "revenue enhancements" like a new refuse fee, has only reluctantly agreed to go along with the plan. And both sides pledge to fight any attempts by unions to seize on the new money in contract negotiations that begin next year.

The problem with that promise is that it wouldn't necessarily be enforced by future mayors and councils, who might very well side with the unions and hand over the keys to the city treasury. Such a situation occurred in 1996, when a timid council approved a labor fact-finder's report that cost the city $30 million in extra pay and pension benefits over three years for the members of one city union local alone.

To help avoid a repeat of that shameful giveaway, council and the mayor must issue a pledge - in writing - that they will divert only a fixed amount of the capital improvements money rather than a percentage of the 0.75 percent revenue.

If there is no guarantee that the money won't end up in union paychecks when better times return, and we see no commitment that it won't, the public will find the Nov. 2 issue difficult to support.

In its rush to deal with a short-term problem, Council is having trouble thinking long-term and recognizing that the cost of providing government is going up faster than the ability to pay.

The city already has made some $10 million in cuts over the past four years in overhead expenses. These cuts have come from the 13 percent of the $230 million annual budget over which council has much discretion. Money for police, fire, refuse, and criminal justice services makes up the other 87 percent, and these are operations that are difficult to cut without compromising vital services.

The 0.75 percent surcharge was sold 22 years ago as a way for Toledo taxpayers to enjoy extra services that couldn't be financed by the basic 1.5 percent city income tax. While it has long ceased being the "temporary" surcharge that originally was proposed, voters have renewed it every four years since it was enacted, giving ample evidence of community satisfaction in how the money is being spent.

Mayor Ford and City Council can avoid squandering the goodwill over Toledo's 0.75 percent surcharge with airtight assurances that the proposed reallocation of tax money won't go toward overly generous union contracts at the expense of the city's future infrastructure needs.



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