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Published: Thursday, 4/1/2010

Back from the brink

THE City of Toledo's new budget includes plenty of optimistic assumptions and messy, last-minute compromises. But it is balanced well enough that the city is in business today, under its own power. Credit for that goes to Mayor Mike Bell and those members of the City Council who decided, after exhausting all other options, finally to do the jobs voters elected them to do.

The most controversial element of the new budget is the council's agreement to save $5.5 million this year by declaring "exigent circumstances" - a fiscal emergency that will enable the mayor to impose benefit concessions on municipal unions that rejected them during negotiations.

The measure has attracted an inevitable legal challenge by the police officers' union. But given most unions' absolute intransigence in denying responsibility for helping the city overcome its budget crisis, it is a step elected officials had to take.

The declaration will enable the mayor to require most city employees - union and nonunion - to pay the costs of the 10-percent share of their own contributions to their pension plans for the rest of the year. The city would continue to pay the 19.5-percent share it is required to bear by state law.

Most city workers also will pay more for their health insurance, based on their salaries. These changes would not affect city firefighters, who agreed to a modest concessions package last week.

Several council members who opposed the exigent-circumstances declaration cited hypothetical legalisms to justify their decision not to cast a tough vote that would offend a powerful special interest. Fortunately, most council members put taxpayers' interest first.

The only question is why Mayor Bell would take this drastic step only to make the concessions temporary. But it still is important that the mayor showed his willingness early in his term to stand up to union rejectionism, even in a limited fashion.

The new budget will enable Mr. Bell to avoid laying off 125 police officers and 125 firefighters, as he had previously threatened. Rumors that police officers would stage an episode of "blue flu" to protest the declaration would be merely the latest example of how out of touch the police union is with taxpayer sentiment.

Mayor Bell dropped or scaled back the major revenue-raising measures in his budget plan. He dumped his proposal for an 8-percent tax on sports and entertainment tickets, which generated furious protests by the city's arts community and sports teams.

He decided not to pursue eliminating the city's reciprocal credit for about 19,000 Toledo residents who work and pay income taxes elsewhere. Instead, he and the council agreed to reduce the credit from 100 to 75 percent.

City households still face a new $15-a-month flat fee for refuse collection. But the new budget calls for reducing that fee to $12.50 next year, making its regressive nature a bit more bearable.

And the mayor promises that the trash fee will drop even more, especially for elderly residents, and that the full tax credit will be restored for Toledoans who work in suburban communities, if voters approve a measure on next month's ballot that would shift as much as $15 million to the city's general fund from the capital budget. Passage of the proposal also would repay city firefighters the cost of the minuscule concessions they agreed to make.

It seems a bit curious that the city was able to whittle away an initially projected $48 million deficit so quickly. The council's decision to boost by $2 million its projection of city income tax collections this year seems based more on hope than a realistic appraisal of Toledo's immediate economic prospects. If council members are betting wrong, the city could discover a new deficit late this year.

The city also assumes it will collect $5 million this year from the sale of city-owned property and other assets, although those sales have not occurred, and that it will realize healthy collections of delinquent taxes, fines, and fees.

For now, though, the city appears to have managed its fiscal catastrophe without mass layoffs or big tax increases. Given what Mayor Bell inherited when he took office in January, it's quite an achievement.



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