More On the City's Budget: Part II

2. The Budget Is Substantively Flawed.
So what's the big deal with an extra million dollars in spending? That's certainly a fair question, given that our governments routinely piss away millions at a time without the least bit of consternation. The problems are both real and symbolic.

The first budget (the one suported by seven members of Council) was balanced. It didn't require any money to be pulled from the City's "carryover surplus" (this is what the County calls a "rainy day" fund). It also didn't require the doubling of parking ticket fines.

The City is facing major economic hurdles over the next couple years. The first is the status of the City's retirement fund. It's underfunded. Chris Smitherman has been sounding the alarm bells on this for some time; while he may be a little over-alarmist on this issue, no one has seriously suggested that there's not a problem with the retirement fund.

The second problem is that Cincinnati will see a major revenue shortfall next year. For some reason, this hasn't garnered much attention, but the earnings tax--the tax on corporate profits inside the City--is necessarily going to be down, given the tough economic times. Because end-of-year numbers and collections aren't in, that hasn't caught up with the City yet. But it will. So a million-dollar spending spree is inherently irresponsible.

What's more, the choices the five-member budget majority made lack common sense. Their offices really need an extra five grand to operate? During budget negotiations, Councilmembers had agreed to go to represented (i.e. union) city employees to try to negotiate COLA increases out of contracts over the next year. But the budget passed gives a COLA raise to non-represented employees, so there's no chance that AFSCME would concede this.

Moreover, the final budget is based partially on an increase in parking ticket fines. That increase will not, in all likelihood, generate as much as Council has projected. The new fines are so prohibitively high that a number of factors will conspire to reduce the number of tickets written and fines collected. The tickets will have a greater deterrent effect (leading to fewer infractions). More people will contest their tickets. And fewer people will pay their tickets. Maybe there are sound policy reasons for high parking ticket fines, but those weren't the motive for the change; revenue was.

I was also critical of the forty thousand dollars budgeted to municipal gardens. Are the gardens a good thing? Yes, they are. But there are at least a half-dozen foundations who would find funds for this if a grant application were submitted. While this is a good government program in prosperous times, this isn't the sort of expenditure that should come from the City's rainy day fund--which we're certainly going to need at the end of next year.

Perhaps the worst part of this is that the leader of the Budget Coup d'Etat was John Cranley, who is essentially a lame duck, in that he's term-limited and cannot run in 2009. So Cranley just doesn't care about the budget problems that Council will face at the beginning of 2010. That's why all four dissenters are members likely to run for re-election. If the City had an extra million dollars to spend, perhaps it should have been spent shoring up the pension fund.

So when the City is laying off workers next Christmas, keep in mind that at least Councilmembers' personal staff got raises and neighborhoods got tulips. I'm sure that will make it worth it for those who lose their jobs.