CINCINNATI - Even though it’s mid-summer and many people aren’t yet thinking about the November elections, Cincinnati’s two major mayoral candidates are busy trying to focus some attention on the race.
Vice Mayor Roxanne Qualls and ex-City Councilman John Cranley both released significant policy proposals Wednesday.
Qualls, who heads City Council’s Finance and Budget Committee, ordered the city manager to craft a plan to have a structurally balanced municipal budget by 2016. She wants the plan presented to the committee during its sole summer meeting, on Aug. 5.
Meanwhile, Cranley unveiled his “Hand Up Initiative,” which is designed to combat poverty and unemployment in the city.
But the question remains: Can either of the important but relatively dry issues divert a public that’s traditionally more concerned with baseball, barbeques and swimming at this time of the year?
Political campaigning in America typically doesn’t begin in earnest until Labor Day, which is Sept. 2 this year. Cincinnati’s politicians usually ramp up their campaigns with the Harvest Home Parade on the city’s West Side, which occurs Sept. 5.
The many press conferences and policy announcements by Qualls and Cranley reveal the increasingly tight nature of the mayoral race.
Qualls’ push for a structurally balanced budget follows the downgrading of Cincinnati’s bond rating July 15 by Moody’s Investor Services. The action means it likely will cost the city millions of dollars more to borrow money in the future for capital projects.
Two factors prompting the downgrade, Moody’s stated, were Cincinnati’s series of structurally unbalanced budgets in recent years, along with its underfunded pension system for city employees and retirees.
Besides pushing City Manager Milton Dohoney Jr. for a budget plan, Qualls said she wants to use “a small portion” of the city’s estimated $92 million upfront payment from a parking lease to increase the city’s contribution to the pension system.
Under Qualls’ plan, some parking lease revenue would be used to raise the city’s emergency reserves to 10 percent, and immediately increase the city’s pension contribution to 24 percent of payroll.
“I strongly urge you to minimize the use of parking revenues to fill the projected deficits for (Fiscal Year) 2015 and to minimize funding any (Fiscal Year) 2014 restorations from the revenue,” Qualls wrote in a memo to Dohoney.
Cincinnati’s pension system lost nearly $1 billion in value during the financial crash of 2008. The percentage of the city's payroll set aside to fund the system has grown from about 11 percent in 2006 to 20 percent this year.
The system has an unfunded liability of $862 million, partially due to rising healthcare costs.
Cincinnati has had structurally unbalanced budgets since 2001.
During that period, Cranley was on council from 2001 to January 2009; and Qualls was on council from August 2007 to present.
The term means city government spent more in expenses than it took in through revenues. Deficits routinely were avoided during those years by relying on using emergency reserves or one-time sources of money to balance the budget.
For example, the 2011 budget used about $27 million from emergency reserves and borrowing from the workers compensation fund to avoid a deficit.
And the city’s budget for 2012 was only balanced by accepting a $14 million payment from Convergys Corp. in return for allowing it to reduce the number of employees it promised to keep at its downtown location.
The 2013 budget also relies on one-time sources of $11.6 million in General Fund carryover money, which accounts for about 28 percent of the total amount.
“To build on the momentum Cincinnati is now experiencing, we must set a course now for a fiscally sustainable future,” Qualls said.
Cranley’s Hand Up proposal involves two phases.
The first phase would involve job readiness training for the long-term under and unemployed. It would also provide participants who complete training with a short-term, part-time transitional job while they search for full-time employment.
The second phase would involve partnering with various community organizations that provide advanced job training to help them expand capacity and put more local residents to work. It proposes to give $1.5 million to agencies like Cincinnati Works, Easter Seals and Partnership for a Competitive Workforce.
Cranley estimates his proposal would help those agencies serve an additional 600 people annually. Based on their current job placement rates, that means about 380 people should be able to find permanent, full-time work after they complete training.
“Cincinnati is experiencing a renaissance that is bringing new investment, people and entertainment to downtown and Over-the-Rhine,” Cranley said.
“Yet we cannot lose sight of the fact that there are thousands of people in our city who are living in poverty and not benefiting from this new urbanism,” he added. “We can't just assume that money will trickle down. We have a responsibility to provide real and meaningful opportunity for all.”
Cranley has identified $2.3 million in proposed cuts at City Hall to pay for the first phase. The largest cuts include taking $450,000 from the budget for non-local travel; $287,670 from the amount spent to buy and license computer software; and $261,618 from the city’s Office of Environmental Quality.
“The cost is a bargain,” Cranley said. “At a little less than $2,250 per beneficiary, we’ll be changing lives forever.
In recent years, Cincinnati has ranked among the top 10 poorest cities in the United States. About one in four Cincinnatians fall below the poverty line, and the city’s poverty rate is almost twice the national average.