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Published: Wednesday, 11/16/2011

Editorial

Balancing the books

The city budget Toledo Mayor Mike Bell proposes for the 2012 fiscal year does not call for higher taxes, major cuts in vital services, or large-scale layoffs. But the mayor warns that keeping the budget balanced amid a persistent recession will demand further sacrifices, especially concessions from municipal unions. Easier said than done, no matter how valid.

The numbers in the operating budget the mayor introduced yesterday make clear that Toledo remains in fiscal trouble. Mr. Bell proposes general-fund spending next year of $235 million -- about the same amount the city spent in 2006. City officials expect $154.5 million in income-tax revenue in 2012 -- less than the city collected in 2003.

Because Gov. John Kasich and the Republican-controlled General Assembly balanced this year's state budget largely on the backs of local governments, state aid to Toledo will fall next year to a projected $13.8 million. That's a reduction of more than one-third from 2010.

Mr. Bell projects a structural deficit -- a gap between spending needs and revenue that is built-in, not just temporary -- of nearly $11 million. He proposes to close the gap by shifting that amount to the general fund from the capital budget. He said in his budget message: "Money that could be used to pave streets and improve parks will instead largely be used to pay salaries and employee benefits."

Even then, the mayor says, city recreation programs will be cut. Job vacancies will be filled case by case, if at all. The city's efforts to privatize some services may lead to employee layoffs, he says, but "not to any large degree."

The city wants to reduce by 4 percent what it pays Lucas County and the Corrections Center of Northwest Ohio for the criminal-justice services they provide. The budgets for Toledo Municipal Court and its clerk's office will shrink.

The news isn't all bleak. The budget includes money for classes of 30 police officers and 30 firefighters to be hired next year, on top of the 50 officers added this year. The mayor says privatizing the city's tow-lot operations will raise money that will help put police on the streets.

Some of the assumptions on which the mayor has built the budget are precarious. He assumes the city will win concessions during its current bargaining with public-safety unions, despite the historic resistance to givebacks that the police and fire unions have displayed. Yet because employee compensation accounts for 80 percent of general-fund spending, it's hard to see a better alternative.

Given last week's thumping -- and proper -- defeat of Issue 2, which Mr. Bell supported, city unions may not feel in much of a mood to compromise with the mayor's administration. But public unions, in Toledo and across Ohio, assume at their peril that the vote on Issue 2 was an endorsement by taxpayers of the status quo in the way local governments operate. The large number of defeated local tax levies on the same ballot offers ample evidence to the contrary.

The city has not closed the books on this year's budget. If it does not erase a projected deficit this year of as much as $7 million, that means additional cuts next year.

The mayor wants city council to pass the budget by early January. As always, much will depend on the resolve that council members show -- or don't -- in the face of tough political decisions.

An effort to stack the council with union sympathizers in last week's election mostly failed. That outcome, it's to be hoped, will embolden council members to keep taxpayers' concerns first.

Mayor Bell is correct that the city needs "true structural change" to deliver the basic services Toledoans expect even in a bad economy. The budget debate, and the contract talks that will set its tone, will make clear to city taxpayers who is committed to change, and who is determined to do business as usual.



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