Mayor Bell releases city budgetWritten by John P. McCartney | | email@example.com
Promoting his three-year tenure as Toledo’s mayor as “a little bit of a miracle that we’ve been able to not raise people’s taxes and provide more police and fire[fighters],” Michael P. Bell presented his 2013 proposed budget Nov. 12, three days ahead of schedule.
“Right now, the greatest debate we have going isn’t whether we’ll be adding police and fire, but where we’re going to put the fire station,” Bell said.
“I can tell you that, three years ago, the news would have been, ‘Can we even afford to have the firefighters and police?’
“This thing is turning around in a very, very positive way. And it’s sustainable because it hasn’t drawn negative numbers since somewhere in the summer of 2010. We’re making the movement that is necessary to move forward.”
The $567.3 million proposed budget [$567,289,906] is a 2.2 percent increase [$1,230,204] over the current budget.
2013 budget proposal
The 2013 proposed budget includes money for:
- a police class of at least 45 candidates;
- a firefighter class of 30;
- a 14 percent increase [approximately $175,000] for city recreation services, despite voters’ Nov. 6 rejection of a levy that supported parks and recreation.
The mayor emphasized in five separate statements that “we’re doing exactly what the public told us they wanted us to do.”
“They said, ‘Provide the services at the same high quality level and do not raise our taxes.’
“They wanted to have more police officers, so we’ve done exactly what they’ve asked us to do.
“They wanted to have more firefighters, so we’re doing exactly what they’re asking us to do.
“Can we do everything? No. We’re keeping it inside the framework of being able to have the budget stay balanced without raising taxes. And we’re doing a lot without increasing any taxes.”
Bell also defended his administration’s increase in the parks and recreation budget, saying, “We’re not going to be doing some sort of knee-jerk reaction because that levy didn’t pass. We can do more, so we’re adding a little bit extra.”
In addition, the budget includes a $13.96 million transfer from the Capital Improvement Program (CIP) to the general fund.
Loss of state revenue
Bell said that between 2011 and 2013, the city will lose approximately $14.7 million from local government funds. “Without that lost revenue, we would not need to transfer anything from our CIP budget, but, fortunately, we have that flexibility, and we’re still keeping our eyes on the capital improvement needs of Toledo.”
Steve Herwat, Deputy Mayor, Operations, blames Ohio’s 2010 General Assembly for the city’s current financial
situation, when legislators cut local government funds by 50 percent when they adopted the fiscal 2012-13 budget.
However, Herwat does not believe Toledoans face an immediate lost of services that the Jan. 1, 2013 federal fiscal cliff threatens.
“As far as the services that the public are going to see in 2013 vs. 2012, it’s no different because our income taxes are growing,” Herwat said. “We’re growing our way out of the recession, slow, but we are growing our way out.”
Herwat acknowledges that anticipated revenue from Hollywood Casino and the Chrysler expansion will help the city’s budget. However, said the Bell administration is concerned that if the political gridlock in Congress is not dealt with soon, it could have a devastating long-term effect on Toledo’s economy.
“That’s something we’re concerned with,” Herwat said. “If we go into another recession, people aren’t going to spending. They aren’t going to be buying new cars, and that could have an impact on employment in our community. We could be back to the spiral we were in 2008 and 2009.”
2013 Capital Improvement Program
The Bell administration expects to present the 2013 CIP budget in December, recommending:
- $32 million in city street and residential road construction and resurfacing (a $4 million increase from 2012);
- the building of a new Fire Station No. 12; and
- the renovation of Fire Station No. 3.
Although the Bell administration has been frustrated with the loss of state funding, Bell said he understands “that the state is also trying to balance their budget. If we did not have the flexibility of the CIP budget approved by the public, we would have greater issues right now.
“I think that the foresight to be able to look at this three years ago and realize that maybe we needed to have a backup plan is actually paying off for us.
“We have steadily moved forward from where we started three years ago. And it’s been a very positive projectile in a direction that a lot of other cities would love to have. It’s been sustained, meaning that we haven’t had many backward trends even though we realize there are that are certain funds that we’re no longer able to [depend on].”
Clarence Coleman, finance commissioner, taxation and treasury, was optimistic in his projection of income in 2013, although he said he “wanted to be conservative in our estimates until Congress decides what it will do about the looming fiscal cliff.”
Coleman said he expects:
- a 3.4 percent increase in income tax revenue [$163.8 million] over anticipated 2012 revenue;
- a 4.5 to 5 percent increase in 2013 tax receipts over this year;
- a continuation in 2013 of the broad base increase in withholding collections he saw this year;
- increased tax revenue from Hollywood Casino revenue and the expansion at Chrysler.
Coleman also emphasized that there are currently no new or increased fees for city services, and none are scheduled.
However, Coleman said the city must balance its projection of increased revenue against a projected:
- 50 percent loss of local government funds, the result of Ohio’s 2010 General Assembly’s fiscal 2012-13 budget;
- loss of estate tax revenue from the State of Ohio, which Herwat said was a $3.1 million source of revenue in 2012;
- decrease in property tax revenue as a result of the Lucas County auditor’s re-evaluation, $2.7 million loss in 2013 than 2012, Herwat said.
City Council has until March 31 to pass the proposed operating budget, although Bell encouraged Council to “act as early as possible” to allow the city to “take advantage of more favorable bidding processes.”