Pluses And Minuses

Cincinnati is just one city in the country facing a major budget shortfall for 2011 to the point where a number of city employees will soon be losing their jobs.  But some on the city council say that the city's $60 million shortfall is the perfect excuse to cut property taxes and force even larger spending cuts.

Hamilton County commissioners have a message for county agencies that feed the elderly, provide health care to the poor, work with developmentally disabled citizens and care for the zoo animals: Get ready for cuts.

Those organizations have a message back: We will fight.

Commissioner Greg Hartmann, backed by Commissioner David Pepper, passed a resolution this month that orders an unprecedented review next year of all eight county levies paid by property taxes.

That review will be done with an eye toward slashing the $245 million taxpayers voted to shell out every year. The eight levies now cost the owner of a $100,000 home $296.45 a year.

But that means Cincy residents must be horribly overtaxed now, right?

An Enquirer review of 10 years of levy payouts shows the $245.3 million property owners will pay next year is $33.6 million more than they paid a decade ago - or a 15.9 percent increase.

Adjusted for inflation, property owners are actually paying less than they did 10 years ago.

But any increase to the levies comes as the county in the last three years has been forced to slash nearly 23 percent from its operational budget, bringing it to $209 million. And in that time the county has shed 1,214 employees, leaving it with a workforce of 4,656.

And more cuts to city and county employees are coming.  Cincy's latest plan is to lay off hundreds of cops and firefighters, too.

And Cincy is far from the only city facing a serious revenue problem.

-90% of all cities have cut backs in spending scheduled for 2011.

-Approximately 14 million people are employed by local munis (not state workers). That is 11% of the entire work force. Do the math. A 15% drop in employment translates to 2.2mm jobs. That would come to 175,000 per month. By itself this would add 1.7% to the unemployment rate. We would be pushing 12% UE as a result.

-Muni spending is 9% of total GDP. A 10% cutback translates into a drag on top line GDP by 1%. The estimates for growth range from 2-3%. If local governments are forced into cuts (they will) a better estimate for GDP is 1-2%. 

So yeah, let's cut some 2 million more jobs from local government in 2011.  They're not real people anyway, right?   Then we can afford to cut property taxes more, because that magically balances things.

Sigh.  And this is going on all over the country.