Bell tells union deficit near $44M; mayor urges unity on budget problem

Enlarge

Mayor Mike Bell had more bad financial news for leaders of the city's unions as they met for the first time yesterday and learned that Toledo's 2010 general fund deficit could approach $44 million.

"We had discussion on where I saw us going, the need for transparency, and the need for a very open dialogue," Mr. Bell said after the hourlong meeting. "It was the first phase of being able to start talking and building relationships about how we are going to fix this [$43.86 million] deficit."

Ten days into his mayoral administration, the former fire chief who was once a union firefighter himself promised to work with city unions to fix the problem.

"The union has been typically looked at as a teammate inside this administration, and I come from a very strong union, Local 92, and we have always been able to work together," he said.

In a letter yesterday to Toledo City Council, Mr. Bell said the city could expect $202.27 million in revenues this year - which includes an estimated $136.1 million from 2010 income taxes.

That money falls short of the 2010 spending estimate of $236.48 million offered in the last budget proposed by former Mayor Carty Finkbeiner before he left office.

"Those figures mean the revised 2010 revenue estimate as compared to the proposed expenditures is a projected deficit [including a $9.653 million projected 2009 carryover deficit] of $43.86 million," Mr. Bell wrote in his letter.

He said the city is still receiving 2009 revenues, such as income tax collections, and also paying 2009 bills, so it doesn't have a complete picture of the 2009 carryover deficit.

The mayor also hinted at his three-pronged approach to balance the city budget, which earlier this week he told The Blade could include mid-contract union concessions, cutting city spending, and possibly asking the voters to increase the city's 2.25 percent income tax.

"It's going to take [the unions'] participation, as well as council, and the members of our city in order to fix this thing," Mr. Bell said.

The city cannot balance the budget with layoffs, the mayor said.

"If we were to lay off all 172 nonessential employees, and that would be inclusive of the mayor and city council, we would only get $13 million," he said.

Mr. Bell said the city would also sell any assets it could, which could include The Docks in East Toledo.

Dan Wagner, president of the Toledo Police Patrolman's Association, said the mayor did not ask for any specific concessions.

As the deficit continues to increase, Mr. Wagner has said the city is unsure of its own finances. He would not publicly concede to reopen the three-year contract that was inked in July, 2009.

"The unions gave back last year, and you had 3,000 people step forward for a city of 300,000," Mr. Wagner said.

Alan Cox, president of AFSCME Local 2058, said Mr. Bell did not ask for concessions yesterday, but he expects that discussion to occur.

"The mayor would like to be able to say to the citizens that if he has to ask anything of them that he asked the unions first," Mr. Cox said.

Councilman George Sarantou wants the mayor's financial investigation team to complete its work before rendering a decision.

"Then we have to make some decisions to get through this year," Mr. Sarantou said. "I'm not going to commit to any kind of raise in fees or taxes until we know where we're at. Let's let this CSI committee do its work, and then we can deal with everything."

He was pleased that Mr. Bell met with the unions.

"Any time the mayor has a meeting with labor leaders, it's very, very important. The previous mayor and labor had horrible relations. [Mayor Bell] is committed to improving communications," he said.

Mr. Finkbeiner's solution to balancing the budget was to impose a $16 monthly trash fee and cut the income tax credit for Toledoans who work outside the city or raise the income tax with a voter referendum.

Mr. Bell has shied away from the fee increase and tax credit reduction.

"I'm not really gung-ho about that, and I don't think council is either," he said.

Councilman Tom Waniewski said he would like to see the unions reopen their contracts - especially the police and fire agreements, which he voted against last year.

"The number one reason I voted no was those pensions," he said. "We are paying too much, and I could never understand why taxpayers pay so much, and then we have to tell them we can't offer this service or that service."

The police and fire contracts required officers and firefighters to pay into their share of their pension premiums for six months, which is nearly complete. The city will resume making the 10 percent employee share of the pension payment, which is on top of the employer's contribution of 19.5 percent. Newly hired police and firefighters will pay the full 10 percent of the employee's pension share.

Mr. Waniewski said he would not support an income tax increase without union concessions first.

"I think the budget is bloated," he said. "I can't see any reason I would support any increase in taxes or in fees unless we get concessions from the bargaining units, and then I would consider that."

Most councilmen reserved judgment on asking voters to hike the 2.25 percent income tax.

"Let's look at all of the angles before that - before we have to decide to put something like that on the ballot," Councilman Mike Craig said.

Councilman Phillip Copeland, a union leader of Laborers Local 500, wouldn't agree that the unions should give back compensation or that the income tax should be increased.

"You have to do something because you can't wish this away and you can't cut your way to a balanced budget with a $40 million deficit," he said.

Councilman Michael Ashford's answer to a tax increase was a flat no.

"I don't see the unions coming back and opening up their contracts to consider concessions. They are just not going to do it," he said. "I have always been a 'vote no' person on any kind of tax or fee increase. … I wish Mike all the luck in the world, but I don't know how he is going to get the house in order."

Contact Ignazio Messina at:

imessina@theblade.com

or 419-724-6171.