Needed - Trash and Lighting Taxes?

Its been almost one year since City Council (including me), approved the Trash and Street Lighting taxes. So, lets take stock of how our budget did in the past year.

Going into 2010, the City had a cash reserve of about 1.6 million dollars. Projected 2010 expenses would have drained that cash reserve, and, still been about 2.2 million in the red.

To meet this crisis, the Administration proposed the trash and lighting fee tax.

As you may recall, the Mayor's Administration stated the following layoffs would occur without the 2.2 million in additional taxes

Police: 10 officers, along with cutting all special details.

Fire: 6 firefighters, along with the elimination of 2 captain, and three 3 lieutenant positions

Recreation: 3 positions, along with the Ice arena and all pools closed.

Finance: 2 full time staff members.

As presented, this was certainly a grim picture, a picture of a more dangerous City, with fewer amenities to attract and keep families.

Now, we flip to the end of 2010: no such cuts occured, and the City ended the year with a 2.7 million dollar cash balance. That's 1.1 million more than when 2010 started.

Given the gloomy forecast Council and the residents were given, we should have seen the City ending 2010 at about the same cash balance level of 1.6 million, or, slightly lower.

So, what acutally happened:

1) The City spent about 1 million dollars less than budgeted (36 million vs 37 budgeted).

2) General fund revenues (from which we pay police, fire, utility bills, ect) were up about 655K.

Higher revenue and lower expenses are generally a good thing. However, in 2010, we took 2.2 million dollars from our citizens for a dire emergency that did not develop.

Putting money away for a rainy day is of benefit to the City. It helps our municipal bond rating and, will cushion our budget for the next downturn. But that has to be weighed against doing this during the very worst recession since the Great Depression; the very real pain caused to our elderly and less fortunate residents.

This is similar to what the Cervenik Administration did in 2004: then, it borrowed 2 million dollars to plug a budget deficit, but wound up putting a million of that money into cash reserves.
What was done in 2010 was far more serious though, as we directly took more money from you.

This is not simple "Monday morning quarterbacking." Budget forecasting is certainly not an exact science. But given the very real economic issues facing Euclid residents (collapsing property values, reduced work hours, unemployment), weighed against taking more revenue, we should have erred on the side of extra caution....asking for less.

That would have meant that for 2010, Euclid should have only gone with the Trash Tax, or the Lighting Tax, or, a far lower trash tax, and, other, less costly combinations.

While I did work to reduce the original Trash Tax proposal of $14.00 and $9.00 dollars, to the $9.00 and $7.00 and fought to let these fees expire in two years, I should have pushed even further to lesson the burden. For that, I do offer my apologies.

In March of 2010, when Council approved these new taxes, there was a promise made that the Administration and Council would take a very long and hard look at the City's methods of raising money (more specifics on an upcoming post). We did discuss a few ideas last spring, but, have really done nothing more.

So, where does that leave us for 2011? Very much where have been for the last several decades: In bad times we cut staffing, and talk about raising more money
1994 Shared City/School income tax passed.
2002 Mayor Oyaski proposed a 5 year tax issue.
2004 Mayor Cervenik borrowing of 2 million dollars
2004 Mayor Cervenik proposes trash and lighting fees
2010 Trash and Lighting fees passed

........................And, in good times, we bring on staff and give raises.

Complicating future budgets is what the State of Ohio might do to balance its budget: reducing government revenue sharing, eliminating the Estate Tax, etc.

Euclid must break out of this pattern by growing our economic base while finally taking a hard, comprehensive look at how the City of Euclid taxes its citizens and businesses. Expect more of your Administration and Council. You deserve it.

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59TH Annual Euclid High Scholarship Dinner Dance

Patrician Party Center, 33150 Lakeland Bvld, Eastlake

Call Barb Carney for your $50 ticket and further details

Let me know what you think, and, don't forget to check out my facebook page for quick takes
on your government.