Ohio's cash-poor cities look to voters for tax hikes

5/4/2009

COLUMBUS - When Columbus Mayor Mike Coleman last week announced plans to ask voters in August to increase the local income tax to stop the city's budget bleeding, he stood united with all seven members of City Council.

But the first real test of Ohioans' stomach for tax hikes in the depths of a recession will come tomorrow when the small city of London, 30 miles west of the state capital, seeks approval of a 0.5 percentage point income tax increase.

Cities across the state have cut services, laid off police officers and firefighters, and gone back to employees for salary and benefits concessions.

Sue Cave, executive director of the Ohio Municipal League, said many cities across the state are reaching the point where additional cuts could endanger public safety.

"Cities have been making cuts for the last couple of years," she said. "The revenue picture hasn't been rosy for a while, but it's really bad now. Cities are getting to the point where they have to look at really essential services, which is tough.

"They've all been through the part where maybe they let attrition come into play, operating short-staffed as retirements occur and they don't fill vacancies," she said. "They've asked their work forces to not go for raises and have asked workers to contribute more toward their health-care coverage. That's already happened. Next, it's layoffs."

The league represents 760 cities and villages. So far, Columbus and London are the only ones Ms. Cave is aware of that are turning to voters for tax increases.

"I think you may see other communities doing that," she said. "I think everybody realizes this is quite serious. I don't know that anybody really wants to see a lot of tax increases. I think the reasoning is that a lot of people are out of jobs or their jobs have been reduced."

Cleveland Mayor Frank Jackson had boasted that the city had been able to close its budget gap without having to make drastic public safety cuts. But a recent $1 million court judgment related to Cleveland's improper hiring practices has led the mayor to warn that the layoffs may yet be in the offing.

In Toledo, the mayor and City Council remain at odds over how to fix the city's remaining $21.3 million budget deficit.

Seventy-five police officers were laid off Friday by Mayor Carty Finkbeiner, who, while fighting off a recall petition, is aggressively pushing for contract concessions from police. He's also proposed collecting more taxes from Toledoans who work out of town by reducing the credit they receive against income taxes they pay where they work. Council has rejected the idea twice.

In the meantime, the budget deficit is worsening by $500,000 a week.

That's in sharp contrast to the united front presented to residents of Columbus when Mr. Coleman, who grew up in Toledo, stood with the entire City Council, all of them fellow Democrats, to endorse what they characterized as the last resort of budget fixes.

Approval of an increase in the city's income tax from 2 percent to 2.5 percent during an August special election is far from a sure thing. Republican candidates for City Council are expected to make it a major issue in their campaigns.

But right or wrong, it was presented as a united decision by city government.

"All [Columbus] council members recognize the urgency of the situation we're in," Coleman spokesman Dan Williamson said. "They have some disagreement on issues, but they really looked at the situation we're in and decided they don't have another viable course of action than the one we're taking here."

On the other side of the partisan coin, in London, where the mayor and five of seven members of council are Republicans, a majority vote of council put the proposed tax increase on the ballot. The decision that voters make tomorrow could provide insight for some other cities trying to decide which voters hate more - higher taxes or fewer public services.

Voters rejected London's request for a similar increase about three years ago. But Steve Hume, London's safety and service director, said this time, the city has stronger public employee support. Their unions have agreed to extend their contracts another year, putting off negotiations on a new pact.

"We are cutting ourselves as much as we can with the services we've been providing," Mr. Hume said. "We still have the basics, but it will get real dangerous if we get too thin. This is a small community, less than 10,000. When you're in a situation where you're cutting a police officer, going from three down to two, that can be real difficult, especially when you have a domestic violence situation and you have to have two officers."

Reducing the number of firefighter teams from two to one could mean trouble when a call comes in while the single team is out on another call, he said.

London's vote is further complicated because many of the city's residents work in Columbus. Those commuters pay income taxes in both cities.

Contact Jim Provance at:

jprovance@theblade.com

or 614-221-0496.