Even if voters had approved Issue 27, a proposed sales tax increase last month, Hamilton County commissioners say they still would need to lay off dozens of county government employees and make other cuts to deal with a looming budget crisis.
The crisis is unrelated to jail overcrowding issues that prompted the push for the tax increase on the Nov. 6 ballot, which was soundly rejected by 56 percent of voters. Hamilton County is facing a $35 million deficit next year unless spending is reduced, mostly due to rising costs for items such as health insurance and fuel as well as $11.2 million in one-time expenditures that must be paid, according to county commissioners Todd Portune and David Pepper.
Under a proposal endorsed by Portune and Pepper, 107 county positions would be eliminated next year. County Administrator Patrick Thompson, who manages the county's daily operations, also is recommending that commissioners consider increasing the real estate transfer tax or reduce the property tax rollback that is tied to the 1996 sales tax increase that paid for new Bengals and Reds stadiums.
'Crazy conspiracy theory'
Portune and Pepper — Democrats who created the plan for the unsuccessful sales tax increase that would've funded a new jail and other safety programs — sharply criticize claims by anti-tax groups that the cuts are retaliation for voters rejecting Issue 27 at the polls.
"We would have had to make the cuts we're making now either way, even if the tax had passed," Pepper says. "All the tough decisions we have to make balance the budget would've had to be made anyhow. The only difference is we have a bigger hole to fill."
Hamilton County's tax revenues haven't kept pace with inflation in recent years, he adds.
He also says past county commissions made imprudent financial decisions such as tapping the reserve fund to rent extra jail space in Butler County and not fully funding the county's health insurance plan or estimated worker's compensation costs.
Special one-time costs facing the county next year include $5.7 million needed to cover an additional pay period in 2008, a calendar-related oddity that happens about once every 12 years; $2.5 million in severance payments for some eliminated positions; $2 million to provide new equipment for the presidential election that's required under federal law; $650,000 in worker's compensation costs stemming from a state audit of the county's Job and Family Services Department; and $350,000 due to legal services for the audit.
"Those are extraordinary, new, one-time things," Portune says.
Hamilton County's budget for this year was about $268 million. For 2008, the proposed budget is $276 million, but the actual amount is about $265.2 million if the one-time costs aren't included.
Anti-Issue 27 groups maintain the tax hike was really sought to relieve pressure on the county's general fund caused by shortfalls in the stadium tax account. Because sales tax revenues have been below initial estimates for the past decade, the county probably will have to take about $10 million annually from its general fund to pay for stadium expenses in coming years. The general fund pays for services such as the sheriff's office, maintenance of county roads, storm sewers and the court system.
Portune and Pepper dismiss the allegation, noting that the pinch won't be felt for five years, when the county begins making payments to Cincinnati Public Schools to replace deferred property taxes for the Reds stadium.
"That's a crazy conspiracy theory. We have until 2013 to figure that out," Pepper says. "Hopefully, sales tax revenues will go up by then."
Leis might sue
At least a few planned cuts, however, are connected to Issue 27's defeat. Sheriff Simon Leis Jr. will lay off the 19 deputies used to patrol Cincinnati's Over-the-Rhine neighborhood. The county doesn't have any money to fund the patrols, which would've been paid using the extra tax revenues, according to commissioners.
"To call that retaliation is hogwash," Portune says. "It's not retaliation to cut what you told people you were going to cut if it lost."
Although Portune says all options remain on the table for dealing with the budget crisis, Pepper and Commissioner Pat DeWine — the group's sole Republican, who opposed Issue 27 — have indicated they probably won't support increasing the real estate transfer tax or reducing the property tax rollback.
For now commissioners are waiting on a more detailed jail study to be completed in December by the New York-based Vera Institute of Justice before deciding on how to overhaul the criminal justice system to reduce recidivism and lessen jail overcrowding.
With Issue 27's defeat, Portune and Pepper also are embracing two of DeWine's suggestions: tapping into the sheriff's drug asset forfeiture account to pay for some changes and using vacant jails in Northern Kentucky to house inmates. It would take an act by the Ohio Legislature or an executive order by Gov. Ted Strickland to allow taking prisoners across state lines, both of which are being explored.
Under Ohio law, counties are required to provide adequate jail space. In fact, a lawsuit filed by public defenders in the mid-1980s prompted construction of the Hamilton County Justice Center. Nowadays Leis has made rumblings about suing the county if a long-term jail solution isn't found soon.
"I don't know if he will sue or not," Portune says. "The sheriff is looking at the whole situation, as we all are." © Hamilton County Commissioner Todd Portune dismisses as "crazy" the argument that layoffs and funding cuts are retaliation for voters' rejection of his proposal for a sales tax for a new jail.