A Cincinnati Enquirer editorial attacked the city's proposed budget for increasing the deficit by $8 million by 2015 but failed to point out that a large portion of the budgetary shortfall is due to a $22 million cut in funding from Republican-controlled Ohio state government.
The editorial claimed that the proposed plan -- which would technically balance this year's budget -- would amount to "kicking the can down the road," and that the primary goal should be a "structurally balanced budget, in which revenues exceed expenses."
The plan under consideration would technically balance this year's ledger. But unfortunately, it would repeat a pattern all too common in recent years of kicking the can down the road. Their plan actually increases the deficit for 2015 by $8 million--but that won't become a crisis until long after the upcoming elections in November. It's become routine, for council members as well as other elected officials, to avoid difficult decisions today because of concerns about the next election.
We need a budget that accomplishes the city's primary goals of attracting new residents and new jobs. At the same time, we need to move toward a structurally balanced budget, in which revenues exceed expenses. With tax increases unlikely, that means cutting expenses. Job cuts will be necessary to get anywhere close to a structurally balanced budget. Despite previous job cuts, the city budget has not been structurally balanced in years.
However, the editorial fails to note that the budgetary shortfall is largely created by a reduction in funds by the Republican-controlled state government. Policy Matters Ohio, an Ohio based think-tank, explained that the massive spending cuts by the state legislature reduced local government funds by a billion dollars during fiscal years 2012 and 2013, with the city of Cincinnati losing more than $40 million compared to 2010 and 2011. Indeed a brief outlining of the budget from the city of Cincinnati pointed out that the deficit was exacerbated by the state-level decision to implement a 50 percent reduction in local government funds, which eliminated "a $22.2 million revenue stream from the City's budget."
Despite the reduction in funds, Cincinnati is still cutting spending as well. The budget proposal laid out by the city manager calls for eliminating almost $11.3 million in spending over the next year, including cuts to police and locally financed programs.
The same day the Enquirer's editorial was published, the Ohio state budget -- which would reduce funds to local governments by $628 million -- was passed out of committee. As Plunderbund, an Ohio-based progressive blog, pointed out, this would mean another substantial reduction in funds to Cincinnati around the same level as this year:
That [the Cincinnati city] budget passed the key committee today, and will soon be passed.
Also passing out of committee today is the Ohio budget. This budget will carve another $628 million from local governments. It's reasonable to expect a 2015 reduction in payment to Cincinnati in the neighborhood of $22 million, which is the reduction this year.
The Enquirer hasn't mentioned that cut at all. Like, Enquirer readers have no idea that the LGF [Local Government Fund] is being cut further.