It only took about a dozen hours of meetings last week, two mayoral vetoes and tangles over the name of a council member’s puppy, but Cincinnati City Council June 27 approved the city’s final fiscal year 2019 budget.
The $407 million spending plan on the city's operating budget side boosts funds for human services organizations and basic services like the city's 911 call center and litter pickup and cuts $10 million in spending. But it also raises a half-a-dozen fees and taxes to close a $32 million deficit.
Council made some of those moves to provide more than $3 million in funding for human services in coming years. Acting City Manager Patrick Duhaney’s budget proposal cut that money — which goes through a process overseen by the United Way to fund organizations mitigating homelessness, unemployment and poverty — down to .69 percent of the budget this year. Mayor John Cranley’s budget had those services funded at .93 percent of the budget.
The budget comes as larger structural issues loom. According to the proposal delivered by Duhaney, the city spent more than it took in over the past two years. What's more, future forecasts in Duhaney’s budget showed that, given current trends, the city is set to continue down that path over coming years — spending at least $6.7 million more than it brings in by FY 2020, at least $11 million by FY 2021 and more than $15 million by FY 2022. With those trends, the city's general fund will be in the red to the tune of $2.7 million by 2020 and by $34 million in 2022.
The new and increased revenue sources council passed with its new budget will address some, but likely not all, of the shortfalls.
The deficit the city faced this year comes from an $8.6 million shortfall in projected income tax receipts as well as an annual $25 million reduction in funding from the state, the city manager says. Ohio lawmakers have whittled down the state's contributions to local government funding over the past few years. Other factors also play in, however, including a pay boost for some city workers pushed for by Cranley and approved by city council two years ago. The boost came outside the usual collective bargaining process and will cost the city more than $7 million next year. On the capital side, the city committed some $7 million in unreserved funds from its sale of the Blue Ash airport to pay for infrastructure and site preparation for FC Cincinnati’s stadium in the West End. It also committed $1.5 million a year for 30 years in its proceeds from Hamilton County’s hotel tax to pay for debt service on bonds for that infrastructure. That could cost the city $45 million in the long run.
There were numerous flashpoints along the way to passing the spending plan, of course, mostly between council’s six Democrats and Mayor Cranley.
Cranley vetoed an ordinance giving $550,000 to the Center for Closing the Health Gap, a group that works on racial disparities in health outcomes, but council overrode that veto. The group, led by former Cranley ally and one-time Cincinnati mayor Dwight Tillery, has weathered media scrutiny about its spending practices and an audit that found less-than-ideal billing practices, though reviewers placed some of the blame on lax city oversight.
During Cranley’s tenure, the city manager’s office had cut the Health Gap a bigger and bigger slice of city funding outside the United Way-administered human services funding process. Under previous mayor Mark Mallory, the Health Gap got $200,000. Under Cranley, it got an ever-increasing amount, up to $1 million in fiscal year 2017. But Cranley and Tillery have been feuding since last year’s mayoral election and the mayor had cut the center out of the budget entirely this year. But in the end, council’s six Democrats prevailed.
Council members Greg Landsman and Tamaya Dennard pushed especially hard for the Health Gap funding. Landsman decried continued disparities in life expectancy and other health outcomes experienced by minority Cincinnatians, calling them “despicable.” But Cranley argued the Cincinnati Health Department is better equipped to address those issues.
“The center does not deliver services to anybody,” Cranley said. “I think the money would be better spent in our health department delivering services to people who don’t have them."
The tug-of-war over spending didn’t end there by a longshot.
Council’s proposals raised fees on parking, building and inspections permits, stormwater services and garbage collection for residents of apartment and condo buildings with more than five units and created a tax for billboard owners.
In addition, council moved to put a charter amendment on the November ballot that, if voters approve, would raise the city’s ticket tax from 3 percent to 5 percent to permanently fund human services organizations at 1.5 percent of the city’s budget.
The extra fees raised howls from conservatives on council. Councilmembers Amy Murray, Christopher Smitherman and Jeff Pastor all voted against them. Pastor gave an impassioned, if unusual, speech during voting against the tax increases, saying they would impact low-income people the most.
“We’re raising taxes on the people who can’t afford it," he said. "This is a travesty."
Some of Pastor’s points had some weight: many low-income tenants of apartment buildings will likely see the garbage removal fees transferred to them by landlords. Others, however, including a claim that the ticket tax would harm poor Cincinnatians, were more of a stretch. The tax will cost an extra dollar on a $50 ticket if passed by voters and the money would be used to fund myriad human services organizations that have been chronically under-funded by the city for years.
Dennard, who came from a low-income background, debated Pastor, pointing out that Pastor supported tax abatements for developers that she claimed contributed to pricing people out of neighborhoods.
“We’re not going to address concentrated poverty until we address concentrated wealth," she said.
"We have two different views on what poverty is, councilmember Dennard," Pastor responded. "We have two different solutions."
Council’s billboard tax also took some heat, with owners of Norton billboards saying it could eat 10 percent of their revenue a year.
“I’m beyond frustrated,” Tom Norton, one of the owners of the company, told council. “You want to raise $700,000 from two companies."
Norton suggested the city’s tax could be illegal, and that he may fight it in court.
At times, discussion took some digressions. During his speech about poverty, Pastor repeated the phrase, “started from the bottom, now we’re here,” a reference to a popular song by the rapper Drake.
Councilman Chris Seelbach mangled the name of Pastor’s puppy (Winnie The Boo Pastor) during a back-and-forth about a missed meeting. But the sideshows were minimal and, for the most part, council labored trying to fit together a financial puzzle fragmented by continued deep cuts from the state’s local government fund, less-than-expected tax revenues and mounting expenses.
There were lots of twists and turns in where the money would come from. Council at first proposed a $200,000 cut to police overtime pay and a delay in the Cincinnati Police Department’s next recruit class, but later backed off the former cut while keeping the latter in place. Councilmembers nixed a program proposed by Mayor Cranley that would have created $400,000 in extra revenue by booting the cars of repeat parking offenders.
Councilman P.G. Sittenfeld floated the idea of eliminating funding for state lobbyists — $88,000 a year — as a way to fund multiple other programs, which was shot down by other council members.
Sittenfeld’s final pitch for that money was to provide roughly $70,000 more to tech groups CincyTech and Cintrifuse. Council restored $177,000 to each from Cranley and Acting Cincinnati City Manager Patrick Duhaney’s budgets, which both cut the groups out entirely. Council also upped funding to the Greater Cincinnati Redevelopment Authority — which will get the standard $700,000 it usually gets — and REDI Cincinnati, which will receive its customary $250,000.
Drama wasn’t isolated to the budget’s operating side. Council won one battle with the mayor outright, restoring $125,000 to match potential grants the city could get from the federal government to complete the Central Parkway bike lane. Cranley has long opposed on-street bike infrastructure. Council also approved another $200,000 for an expansion of Cincinnati Red Bike, including funding for an e-bike program.
The streetcar caused friction, as it tends to do. Council passed the transit project’s $4.4 million budget, though, as Cranley was quick to point out, future years look grim for the project if ridership and revenue don’t increase.
Councilman Landsman says he has a plan for that, which includes hiring a manager for the streetcar at $150,000 a year. That salary would come from cuts to other expenditures within the streetcar’s budget, including payments to the Southwest Ohio Regional Transit Authority.
Another gambit by Landsman to improve the streetcar’s performance is a no-go, at least for now.
Cranley vetoed a move by Landsman that would have spent an undetermined amount up to $600,000 to move a bus stop downtown that has been the top obstruction for Cincinnati’s streetcar.That money would have come out of the streetcar’s capital budget, which currently sits about $1 million. Council, which approved Landsman’s idea 5-3, may have the votes to override Cranley’s veto — Councilwoman Dennard was absent during the vote, and, if she supports the proposal, the mayor would be overruled. That vote likely won’t come until August, however, when council returns from its summer recess.