In the News: budget-related tax increases and job losses
Hey folks, have you missed us? We’re watching headlines from around the state, and impacts of this budget continue to trickle in. While some communities are better positioned to weather the loss of the estate tax and half their state funding, others have already made cuts and are down to the bone. Service cuts, layoffs and tax increases are the inevitable result, as this editorial from the Toledo Blade points out. We also read about the first potential tax increase tied to the budget.
Lucas County’s Workforce Development Agency sent pink slips to four employees last week. They are just the tip of an iceberg created at the end of June when Gov. John Kasich signed a two-year budget that was balanced largely on the backs of schools, local governments, libraries, nursing homes, and social-service programs
Unlike the federal and state governments, local officials can’t just kick the can down the road. They are at the end of a dead-end street. So they have three choices: raise taxes, cut waste, or reduce services. But tax increases are difficult to sell to voters who feel overtaxed already, are unemployed, or have had their wages or hours cut. And because reducing waste, while helpful, won’t balance most budgets, they really only have one choice: eliminate jobs and reduce services.
The four layoffs at the Workforce Development Agency are the county’s attempt to cut costs without cutting services that, as Commissioner Pete Gerken pointed out, help clients find jobs. Toledo Public Schools will have to cut scores of jobs — and inevitably reduce services — to make up for lost state and federal funding. Toledo got out of the trash-collection business — at an unknown cost to residents — because the city had deficits of its own that were compounded by cuts in state aid.
This pattern will be repeated by social service agencies, libraries, schools, townships trustees, village and city councils, and boards of commissioners in all 88 Ohio counties. The simple truth is that you can’t cut billions of dollars from all these budgets without impacting jobs, services, or — more likely — both. How many jobs will be lost and how much services will be reduced are anyone’s guess.
An income-tax increase is needed because the current $23.6 million general-fund budget is stressed, Smith said today. A combination of lower-than-projected collection of income-tax revenue and less local-government funding from the state has thrown the budget out of whack, he said.
The general-fund budget pays about 220 city employees, including about 145 police officers and firefighters, Smith said.
The city has cut 43 positions through attrition and layoffs in recent years. Further cuts will hurt city services, he said.
“We have tried to reduce costs. But it’s all catching up,” Smith said. “It would not be a good choice to further reduce safety forces, so we’re looking for support from taxpayers. We’re now facing the wall and we need some help.”
[RE: SB5] The Stark County Auditor’s office estimates the county could save $1.56 million ($358,464 in the general fund) if all employees paid at least 15 percent of their health care premiums and $2.46 million ($788,483 in the general fund) if all county employees paid at least 10 percent of their pension. [...]
Bickis said any potential savings the county could see from the two laws could be decreased, if not eliminated, by the budget bill’s cut to the county’s share of state funding and some of Senate Bill 5’s provisions that could raise the county’s legal costs.
County officials are bracing for a nearly 50 percent cut — nearly $3 million — during the next two years, but have not received final figures.