With many of Ohio's big cities facing budget deficits, is it time for local government to get back to basics? 

 

Why are cities that are millions of dollars in debt trying to run golf courses and supermarkets?  If these things are deemed as necessities, in what other areas of government would cutting spending make more sense?  Public safety?  Road maintenance? 

 

Do the high taxes (with more increases looming in some cases) make sense in this economy?

 

http://blog.cleveland.com/metro/2010/06/cleveland_facing_30_million_bu.html

 

http://www.dispatchpolitics.com/live/content/local_news/stories/2009/12/28/copy/city_taxes.ART_ART_12-28-09_A1_MOG4078.html?sid=101

 

http://www.wlwt.com/money/23795333/detail.html

 

This state, and its cities, are facing tough decisions now and for the foreseeable future.  In order to close the gap on some of these deficits, some services are going to have to be cut, or taxes are going to have to be raised.  What we have now is simply unsustainable.  What are you willing to give up?  How much more are you willing to pay?

Our prison population multiplied at a time when crime rates were naturally decreasing due to demographic trends.  The population was aging, so there were fewer men in the age group that tends to commit crimes.  IIRC, Ohio had 7000 or 21,000 prisoners and now it has 50,000. 

 

I expect that our prison budget can be cut.  I know that it is in the one billion dollar plus range.  Unfortunately, the prison lobby campaigns against reduced sentences and alternative sentencing.

I agree with Boreas.

 

[The end of the universe following that statement should relieve me of the obligation to elaborate ...]

 

Still around?  Weird.

 

I also think a lot more than just the prison budget could and should be cut, of course, including a number of Boreas' sacred cows.  But the prison budget should definitely not be immune from the axe.

Well, I put my proposal out there, Gramarye.  What's yours?

Cut social spending as well, including both transfer payments and inflated wages and benefits of unionized public sector employees (particularly pension benefits).

 

And before you say that that's not specific, neither was yours.  Also, the Ohio OBM site (http://obm.ohio.gov/sectionpages/Budget/default.aspx) is deliberately opaque.  Good luck finding, for example, just how much we send to nursing homes (one of the most powerful lobbies in the state), and how much of that is discretionary state funding vs. how much is federal money using the state government as a conduit.

 

That said, this thread is already largely off-topic, since the prison expenses and most of our transfer payment expenses are at the state level, not the local level.  Safety and education expenses, however, are often at the local level.

Ohio government should phase out the Port Authorities.  They are an unneeded, wasteful layer of local government.*  There is nothing that they are doing that cannot be done by the Ohio Department of Development (job creation) and  county governments (port business).

 

*Unelected and unaccountable.

To add a baseline to the discussion as it relates to municipal government, here's the City of Cleveland's 2010 budge: http://www.city.cleveland.oh.us/clnd_images/finance/OBM/2010Budget.pdf

 

Clevelander17, for what it's worth, the city's "small enterprises," which include cemeteries, the two public markets, golf courses, parking facilities and the convention center together turn an operating profit of about $800k, though almost all of it is from the convention center (probably just a cash transfer from the publicly funded operator).  The golf course is the biggest loser, running a $133k deficit.  I'm open minded to any changes that improve the city's bottom line and meet its operating goals, but I don't know how much budget relief is going to be squeezed out of these.

 

It's a state level cut, and it's politically impossible, but there is no reason why the state should be paying the property taxes of senior citizens without recouping it all from their estates.

Thanks for posting that, StrapHanger. 

 

The bulk of Cleveland's deficit is in the water dept.  In the in depth budget, most of this goes towards "debt service", and it appears that it is being paid out of carried over balance from last year.

 

The general fund is slightly less than $4 million in the red.  That's less than 1% of the half billion dollar general fund budget.  There is also a carry over balance that covers that amount.  I think that we should see revenue increase as we begin clawing out of this recession, so I wouldn't recommend any more cuts.

 

Also, somewhat of a side, but anyone know what happened to the Dept. of Community Development?  It appears it got axed this year.

 

The problem is making local government more responsible. We're spending over $100 million to add more lanes to some of our roads while we aren't budgeting nearly enough to even keep them in decent condition.

That said, this thread is already largely off-topic, since the prison expenses and most of our transfer payment expenses are at the state level, not the local level.  Safety and education expenses, however, are often at the local level.

 

From what I see of local budgets here in the Dayton region the big annual expenses are public safety (police and fire) and education, mainly the payroll expenses (wages and benefits).  The other stuff is pretty minor in comparsion (unless you are talking about capital expenditures).  Utilities (water and sewer) are usually operated as self-sustaining enterprise funds.

 

One thing I like about public finance in this area is that expenditures are somewhat line-item funded via tax levys, so the citizens have some control over earmarking where their money goes.  Things that have broad-based support, like parks and libraries, usually see their levys pass.

 

The thing  don't like is that these levys are property-tax based.  I think if a public benefit is widely distributed it should be based on income tax.  This introduces progressivity (taxes are based on ability to pay) and removes the free-rider issue of renters not directly paying taxes for the services they use.

 

 

I've got some ideas:

 

county schools

lose the townships

larger water and sewer districts

more gravel roads

schools funded by somtehing other than property taxes

 

Notice that these are things most "proponents of small government" never suggest.

^

They like small government because it means more local control.  Or something.

I've got some ideas:

 

county schools

lose the townships

larger water and sewer districts

more gravel roads

schools funded by somtehing other than property taxes

 

Notice that these are things most "proponents of small government" never suggest.

 

That's because county schools would mean losing local control of schools to a larger form of government.  The most well run schools are usually medium to medium-large in size.  The biggest schools are usually horribly inefficient, and the smallest schools lack a lot of resources and oppurtunities.  Some places could use county schools (rural counties, for example), but not everywhere.

 

Townships are smaller forms of government than most cities, and some would say they are a more efficient model.

 

Again, why would a proponent of smaller government want a larger sewer/water district? Most of these are run pretty efficiently as they currently exist, and making them larger would just lose localized control.

 

There's a thread about gravel roads on UO somewhere, it's a pretty good idea as road maintenance cost continues to escalate.

 

This introduces progressivity (taxes are based on ability to pay) and removes the free-rider issue of renters not directly paying taxes for the services they use.

 

Sorry, but the "free rider" issue is a non starter argument.  Renters pay their property taxes through their rent.  It may not be "direct", but they sure are paid.  Renters understand this, landlords sure as hell do, and probably most intelligent homeowners do.  Politicians looking to "divide and conquer" their way to election might hope that they don't, though.

^On top of that, the income tax decidedly favors homeowners, so if your concern is equity across housing tenures, the income tax isn't really so swell.

 

 

  ^---- ???  :?

^Mortgage interest deduction.

In terms of the role of local government, I agree that local governments do a lot of unnecessary things.  That said, in terms of the size of local government, the real bloat is on spending too much on functions that are within local government's role.  Just because a particular function is within a local government's proper purview doesn't mean that all expenditures in support of that function are efficient or warranted.

...

county schools

lose the townships

larger water and sewer districts

more gravel roads

schools funded by somtehing other than property taxes...

Why not? Hawaii has one, big state-wide school system.

This introduces progressivity (taxes are based on ability to pay) and removes the free-rider issue of renters not directly paying taxes for the services they use.

 

Sorry, but the "free rider" issue is a non starter argument.  Renters pay their property taxes through their rent.  It may not be "direct", but they sure are paid.  Renters understand this, landlords sure as hell do, and probably most intelligent homeowners do.  Politicians looking to "divide and conquer" their way to election might hope that they don't, though.

 

This isn't entirely true.  It isn't always feasible for landlords to pass those costs on to renters.  They may pay a fraction of those costs, at best.

This introduces progressivity (taxes are based on ability to pay) and removes the free-rider issue of renters not directly paying taxes for the services they use.

 

Sorry, but the "free rider" issue is a non starter argument. Renters pay their property taxes through their rent. It may not be "direct", but they sure are paid. Renters understand this, landlords sure as hell do, and probably most intelligent homeowners do. Politicians looking to "divide and conquer" their way to election might hope that they don't, though.

 

This isn't entirely true. It isn't always feasible for landlords to pass those costs on to renters. They may pay a fraction of those costs, at best.

 

+1

 

The elasticity of the demand for the apartment(s) determines how much of the landlord can increase the rent in response to increased costs--whether those landlord's costs are taxes or utilities or insurance or anything else.  Given the softness in the rental market (not as soft as the mortgage market, but still soft), the elasticity of that demand is definitely less than complete.

This introduces progressivity (taxes are based on ability to pay) and removes the free-rider issue of renters not directly paying taxes for the services they use.

 

Sorry, but the "free rider" issue is a non starter argument. Renters pay their property taxes through their rent. It may not be "direct", but they sure are paid. Renters understand this, landlords sure as hell do, and probably most intelligent homeowners do. Politicians looking to "divide and conquer" their way to election might hope that they don't, though.

 

This isn't entirely true. It isn't always feasible for landlords to pass those costs on to renters. They may pay a fraction of those costs, at best.

 

I don't understand, if a landlord is not charging the renters enough to cover their property taxes then how could they remain as an ongoing business.  Landlords, for the most part, are not in the business to provide charity. 

This introduces progressivity (taxes are based on ability to pay) and removes the free-rider issue of renters not directly paying taxes for the services they use.

 

Sorry, but the "free rider" issue is a non starter argument. Renters pay their property taxes through their rent. It may not be "direct", but they sure are paid. Renters understand this, landlords sure as hell do, and probably most intelligent homeowners do. Politicians looking to "divide and conquer" their way to election might hope that they don't, though.

 

This isn't entirely true. It isn't always feasible for landlords to pass those costs on to renters. They may pay a fraction of those costs, at best.

 

I don't understand, if a landlord is not charging the renters enough to cover their property taxes then how could they remain as an ongoing business. Landlords, for the most part, are not in the business to provide charity.

 

Well, if the rent is not even enough to cover the property taxes, then the landlord is definitely in trouble.  However, that's not what was really said above.  The point was that tenants do not effectively have the full cost of property taxes passed on through to them.  Therefore, if property taxes go up by $120/year, it's unlikely that tenants will see their rent increase by $10/mo.; likewise, if property taxes go down by $120/year, it's unlikely that tenants will see their rent cut by $10/mo.  In the former case, the landlord will absorb some as loss; in the latter, the landlord will keep some of the surplus as profit.

This introduces progressivity (taxes are based on ability to pay) and removes the free-rider issue of renters not directly paying taxes for the services they use.

 

Sorry, but the "free rider" issue is a non starter argument. Renters pay their property taxes through their rent. It may not be "direct", but they sure are paid. Renters understand this, landlords sure as hell do, and probably most intelligent homeowners do. Politicians looking to "divide and conquer" their way to election might hope that they don't, though.

 

This isn't entirely true. It isn't always feasible for landlords to pass those costs on to renters. They may pay a fraction of those costs, at best.

 

I don't understand, if a landlord is not charging the renters enough to cover their property taxes then how could they remain as an ongoing business. Landlords, for the most part, are not in the business to provide charity.

 

Well, if the rent is not even enough to cover the property taxes, then the landlord is definitely in trouble. However, that's not what was really said above. The point was that tenants do not effectively have the full cost of property taxes passed on through to them. Therefore, if property taxes go up by $120/year, it's unlikely that tenants will see their rent increase by $10/mo.; likewise, if property taxes go down by $120/year, it's unlikely that tenants will see their rent cut by $10/mo. In the former case, the landlord will absorb some as loss; in the latter, the landlord will keep some of the surplus as profit.

 

But then it becomes a business decision whether to pass the cost onto the renter.  I don't think the relationship should be looked at as whether the Renters are absorbing the full property tax of the building, that is the sole responsibility of the Landlord. 

^But you have to think about it in terms of the affect on renters if you're worried about the equity of property tax impacts .  Gramarye is probably right that property taxes are not fully passed on to tenants, if nothing else, because differing tax rates in neighboring  jurisdictions (i.e., there are substitute goods without the same burden).  But on the other hand, homeowners who itemize don't pay for all of their property taxes either, because of their tax deductability.

These are good points.  Personally, I feel like levy's pass a lot in urban areas with a high percentage of renters because the cost of a property tax hike isn't directly passed down to the renters. If there's a $300 per $100,000 home property tax hike, the landlord will face the effects of it, while most renters won't care because they already have a lease, and figure the lease will go up the next year, anyways. 

Back to the topic at hand:

 

I also have a slight problem with the premise of the OP's question.  Most of Ohio's cities aren't facing deficits.  They are facing projected shortfalls, just like the federal government would be if it were forced to balance its books.

 

I worry much less about the excesses of local government both because the exit option is easier and because the balanced operating budget requirements (with the ability to borrow for actual capital projects) forces civic leaders to face reality and constrains the amount of Keynesian fantasies they can indulge in (and send me the bill for).  Do I think municipalities should be running golf courses?  Not particularly, but the main reason I oppose that is because of the amount of land wasted, not because of the direct budgetary impact.  (Obviously, wasting land has an indirect budgetary impact.)  I don't particularly have a problem with municipal rec centers, at least conceptually, which can generally serve more people on a smaller footprint than a golf course.

I worry much less about the excesses of local government both because the exit option is easier and because the balanced operating budget requirements (with the ability to borrow for actual capital projects) forces civic leaders to face reality and constrains the amount of Keynesian fantasies they can indulge in (and send me the bill for).

 

Yes, the exit option is easier, which is partly why people are fleeing from most of the big cities in Ohio, and even many of their core suburbs.  And as you're seeing above, in many cases these cities aren't making the tough decisions, but instead raising taxes.  If you care about the cores of Ohio's big cities, I think this is something worth fighting for.  If you don't particularly mind watching these cities tax and spend themselves to destruction (and I don't think that's hyperbole), I can understand being content with the status quo.

 

    "Do I think municipalities should be running golf courses?  Not particularly,..."

 

    What a fascinating world! I know of a couple of local governments that are purchasing as much parkland as possible in order to prevent development!

 

    Why so? Because they don't want low-income folks moving in and hogging all of the local school resources. So, in order to prevent some developer from building new residential, they purchase the land to pre-empt it.

 

    So, the "wasted" land is actually reducing the burden on the local school district.

 

     

Yes, the exit option is easier, which is partly why people are fleeing from most of the big cities in Ohio, and even many of their core suburbs. And as you're seeing above, in many cases these cities aren't making the tough decisions, but instead raising taxes.

 

I can understand the tax and spend criticism of some of the school systems, but does your critique really apply to the cities?  I'm really only familiar with Cleveland, which has been making all sorts of tough spending decisions to close its budget gap.  The only tax increase I can think of is the garbage fee, which stinks, but doesn't seem part of an out of control ratcheting up of taxing and spending.  I may be forgetting other fees and taxes though, so am open to being reminded of others.

Cut... both transfer payments and inflated wages and benefits of unionized public sector employees (particularly pension benefits).

 

How exactly do you plan to do that?  Which employees specifically are you speaking of?  Cops?  Firefighters?  Service Department?  Teachers?  All of the above?

 

    "Do I think municipalities should be running golf courses?  Not particularly,..."

 

    What a fascinating world! I know of a couple of local governments that are purchasing as much parkland as possible in order to prevent development!

 

    Why so? Because they don't want low-income folks moving in and hogging all of the local school resources. So, in order to prevent some developer from building new residential, they purchase the land to pre-empt it.

 

    So, the "wasted" land is actually reducing the burden on the local school district.

 

Well, even if I conceded that "preventing the influx of low-income residents" was part of the "role of the local government," which I don't, I'd still say that this sets up a false dilemma: golf course (or parkland) vs. low-income residential.  (Also, parks are cheaper to maintain than golf courses and are more inclusive.)  Under the status quo, cities could still simply zone minimum unit sizes or lot sizes to prevent that low-income residential from coming in, without having to shell out public money for land just to keep people out.  Of course, I'm not exactly happy with that status quo, either.  As I've said on these boards and elsewhere, I favor a completely privatized education system with universal public vouchers, meaning that all of those "low-income residents" that would be "hogging" the local school resources would suddenly become providers of those resources instead, because they'd be carrying a $7000+ annual check with them wherever they went.

 

Also, because municipal governments and school districts are different public authorities in Ohio, I'm guessing that the municipality's real concern with exclusionary zoning (or exclusionary land purchases) is the concern for the additional burden on the public safety forces, or just outright class animus, rather than concern for the school district specifically.

  "Under the status quo, cities could still simply zone minimum unit sizes or lot sizes to prevent that low-income residential from coming in..."

 

    It's not quite that easy. If cities get too agressive with zoning, the land owner or developer will take them to court, and often win. This usually applies to undeveloped land.

 

    If the land is already developed, and property values are dropping, then sometimes the high-income people will move out and be replaced with low-income regardless of zoning.

 

    "The low-income residents will suddenly become providers..."

 

    It costs more to educate a child from a low-income family than a high-income one because of parent involvement. From a school district's perspective, you want above-average students, not below-average ones, even if they all come with vouchers.

 

   

Cut... both transfer payments and inflated wages and benefits of unionized public sector employees (particularly pension benefits).

 

How exactly do you plan to do that? Which employees specifically are you speaking of? Cops? Firefighters? Service Department? Teachers? All of the above?

 

Teachers, definitely.  They make substantially more than their private sector equivalents (and I've heard--and rejected--all the arguments as to why that disparity is justified because of the different "environment," "lifestyle," etc.).  Police and fire, depending on how much they're currently making (and how much their wages have risen faster than inflation since public sector unions were allowed, which wasn't actually all that long ago).  In both cases, defined benefit pension plans need to go, and the government shouldn't be contributing more towards employee health and other insurance benefits than the private sector norm, particularly for teachers.  (Police and fire may--may--be different because of the fact that they are in professions that deliberately put them in harm's way more than most other professions, though there are definitely some hazardous private-sector professions as well.)

 

    "Do I think municipalities should be running golf courses?  Not particularly,..."

 

    What a fascinating world! I know of a couple of local governments that are purchasing as much parkland as possible in order to prevent development!

 

    Why so? Because they don't want low-income folks moving in and hogging all of the local school resources. So, in order to prevent some developer from building new residential, they purchase the land to pre-empt it.

 

    So, the "wasted" land is actually reducing the burden on the local school district.

 

     

 

Doesn't really make a difference when the golf course you own is actually two or three cities away.  The City of Cleveland is running a golf course which isn't even within city limits.  :clap:

Cut... both transfer payments and inflated wages and benefits of unionized public sector employees (particularly pension benefits).

 

How exactly do you plan to do that? Which employees specifically are you speaking of? Cops? Firefighters? Service Department? Teachers? All of the above?

 

Teachers, definitely. They make substantially more than their private sector equivalents (and I've heard--and rejected--all the arguments as to why that disparity is justified because of the different "environment," "lifestyle," etc.). Police and fire, depending on how much they're currently making (and how much their wages have risen faster than inflation since public sector unions were allowed, which wasn't actually all that long ago). In both cases, defined benefit pension plans need to go, and the government shouldn't be contributing more towards employee health and other insurance benefits than the private sector norm, particularly for teachers. (Police and fire may--may--be different because of the fact that they are in professions that deliberately put them in harm's way more than most other professions, though there are definitely some hazardous private-sector professions as well.)

 

OK.  That answers "who"..... but what about the "how"?  Do you take eliminate SERB, yank Chapter 4117 out of the Revised Code, become the 3rd state without public employee collective bargaining rights?

 

 

    Gramarye, your ideas have merit but how do you execute them? Most teacher's unions, etc, have contracts that were signed by the previous administration.

 

    Plus, the unions have so many voting members that any political move not in favor of the teachers, etc., has a small chance of being passed.

 

   

With all due respect, I think that it would be ridiculous to target teachers, firefighters, or police officers that are actually on the front lines.  When talking about governmental waste, I think it's the pencil-pushing bureaucrats that need to go first and foremost.

With all due respect, I think that it would be ridiculous to target teachers, firefighters, or police officers that are actually on the front lines.  When talking about governmental waste, I think it's the pencil-pushing bureaucrats that need to go first and foremost.

 

Boy, is this is a cliche or what?

 

....as I mentioned about the big ticket items are public safety and education.  Tough sh!t if you can't address that.

 

 

....as I mentioned about the big ticket items are public safety and education. Tough sh!t if you can't address that.

I agree and wish I knew what Jeffery's post said before it was edited in case there was something of substance.

 

Public safety is number one for me because I know safety is the primary reason many people completely disregard living in many urban neighborhoods.  Not to make this a crime discussion or anything like that, but in certain places with extremely high crime rates I think government (not sure what level) should step in to better enforce order.

With all due respect, I think that it would be ridiculous to target teachers, firefighters, or police officers that are actually on the front lines. When talking about governmental waste, I think it's the pencil-pushing bureaucrats that need to go first and foremost.

 

Boy, is this is a cliche or what?

 

....as I mentioned about the big ticket items are public safety and education. Tough sh!t if you can't address that.

 

 

 

Wow, I was hammered when I made that post.

 

But anyways, I still agree with the premise--it may be cliche, but it's the absolute truth.  And besides, cities don't even deal with public education, that's the responsibility of school districts.  Though I think an argument can be made against "public" education, or at the very least, what it's become here.

State Senator Eric Fingerhut was working with several suburbs of Cleveland to enable them to combine services as a means of saving money.

 

Not every suburb needs a fire chief and a ladder truck.

State Senator Eric Fingerhut was working with several suburbs of Cleveland to enable them to combine services as a means of saving money.

 

Not every suburb needs a fire chief and a ladder truck.

 

I've actually heard of some promising moves being made towards the regionalization of fire departments around here.  I think Pepper Pike and some neighboring Chagrin Valley suburbs are close to combining their departments.  Also a few of the west shore suburbs were talking about doing the same, though I'm not sure if that's still likely to happen.