Occupy Wall Street may have been onto something. A new report from left-leaning Center on Budget and Policy Priorities (CBPP) found Ohio’s income gap — the income difference between the rich and poor — is wide and growing.
Since the 1970s, the poorest 20 percent saw no change in real
income, the middle 20 percent gained 21.1 percent, the top 20 percent
gained 50.6 percent and the top 5 percent gained 85.1 percent.
In terms of real dollars, low-income and middle-income Ohioans have actually seen their income drop since the 1990s. The drop caused a “lost decade” for Ohio’s lower and middle classes, according to the report. The bottom 20 percent saw a 6.9 percent drop in real income from the late 1990s to the mid-2000s, while the middle 20 percent saw a 2.9 percent drop. Real incomes for the top 20 percent and top 5 percent remained the same.
The shifts have caused a startling difference in real income, which the report calculated by looking at real dollars after federal taxes and including the value of the Earned Income Tax Credit, housing subsidies and food stamps. The poorest 20 percent make on average about $20,500, and the middle 20 percent make on average about $58,100. Meanwhile, the top 5 percent make about $221,800 — 10.8 times as much as the bottom 20 percent and 3.8 times as much as the middle 20 percent.
Real dollars are a measurement used to gauge the value of money and income after inflation. If a family sees its income in real dollars drop, it means income increases, if they exist, are not keeping up with inflation.
The widening income gap is part of a nationwide trend. In comparison to other states, Ohio mostly did better than the national average. Ohio was not included in any of the six top 10 ranks for inequality, which ranked states for rises in inequality during different time periods. During the late 2000s, New Mexico, Arizona, California, Georgia and New York had the greatest gaps between the wealthiest and poorest. In the same time period, New Mexico, California, Georgia, Mississippi and Arizona had the biggest gaps between the wealthiest and middle.
Part of the cause for the widening gap is the recent recession, but the CBPP report found that the wealthiest have seen their incomes rise again in the recession’s aftermath, while middle and lower incomes have not. The report also blamed government policies — deregulation, trade liberalization, the weakening safety net, the lack of effective laws regarding collective bargaining and the declining real value of the minimum wage — and the expansion of investment incomes, which the CBPP says “primarily accrue to those at the top of the income structure.”
The report finished with some suggestions for states: raise minimum wage and index it for inflation, improve unemployment insurance systems, make state tax systems more progressive and strengthen safety nets.
Policy Matters Ohio, which pointed to the findings in a statement, says the report warrants action. “Poor and middle-income families are seeing their income fall in real dollars and relative to higher earners,” said Amy Hanauer, executive director of Policy Matters Ohio, in the statement. “When households already subsisting on less than $23,000 a year see their incomes drop, that means hunger, instability, poor school performance and worse. Ohio needs to do more to improve the lives of families in this state.”
Gov. John Kasich touted a rosy, progressive vision when announcing his education reform plan Jan. 31, but reality does not match the governor’s optimism. It’s true Kasich’s proposed 2014-2015 budget
will not reduce school funding, but under the Kasich administration,
local schools will still have a net loss in state funds.
The governor’s office released tentative budget numbers yesterday that show the Kasich plan will give Cincinnati Public Schools (CPS) $8.8 million more funding for the 2014 fiscal year. But that’s not enough to make up for the $39 million CPS will lose in the same fiscal year due to Kasich’s first budget, which was passed passed in 2011. Even with the new education plan, the net loss in the 2014 fiscal year is $30.2 million.
The problem is Kasich’s first budget had massive cuts for schools. The elimination of the tangible personal
property reimbursements (TPP) hit CPS particularly hard, as CityBeat previously covered (“Battered But Not Broken,”
issue of Oct. 3). In the Cut Hurts Ohio website, Innovation Ohio and Policy Matters Ohio estimated Kasich’s budget cuts resulted in $1.8 billion less funding for
education statewide. In Hamilton County, the cuts led to
$117 million less funding.
Kasich’s massive cuts didn’t even lead to lower taxes for many Ohioans. A report from Innovation Ohio found school districts and voters made up for the big education cuts with $487 million in new school levies. In 2012, Cincinnati voters approved a $51.5 million levy for CPS. The school levies are a direct increase on local income and property taxes, but they’re measures Ohioans clearly felt they had to take in the face of big state budget cuts.
For more analysis of Kasich’s budget, check out CityBeat’s other coverage:
Vice Mayor Roxanne Qualls is asking the U.S. Department of Housing and Urban Development (HUD) to stop the sale of 748 housing units to a New York company — potentially preventing a repeat of a similar sale back to 2007 that led to dropping property values in the area.
In a press release Tuesday, Qualls argued that locals should be given the opportunity to purchase the project-based Section 8 housing in Walnut Hills, Avondale and Millvale. Currently, HUD is bypassing local communities with plans to sell the housing to a corporation controlled by the Puretz family of Brooklyn, N.Y.
“Cincinnati’s residents are still recovering from the massive disinvestment that was allowed to occur with an eerily similar situation in 2010,” Qualls said in the release, referring to a similar sale that culminated in a huge drop in property values between 2007 and 2010.
In 2007, HUD sold 618 subsidized housing units to NY Group
OH 1 LLC, a company with no previous housing experience in Cincinnati,
according to Qualls’ release. As the 2008 financial crisis and Great
Recession pulled down the global economy, property values dropped all
around the nation, but things went particularly south in NY Group’s
Cincinnati buildings. The owner eventually defaulted on the housing
units, and Fannie Mae foreclosed in 2010.
Property values went from $21.5 million to $7 million between 2007 and 2010, when the units were sold in a sheriff’s sale. In that time period, the buildings blighted, with residents complaining about deteriorating structures, broken lighting, bed bugs, cockroaches and mold. In one case, an apartment’s restroom ceiling reportedly collapsed.
Qualls is focused on preventing more blighted buildings: “Preservation of the housing in good condition is vital to the improvement of our neighborhoods. Our neighborhoods cannot afford to have more blight brought on by an absentee owner. Because these properties are supported by government funding, it is vitally important that HUD get public input from the City of Cincinnati and Avondale, Walnut Hills and Millvale residents and stakeholders about this proposed new transfer of HUD funded properties before making any further decisions.”
Qualls has invited the local HUD field office director to the Feb. 26 Livable Communities Committee meeting to discuss the sale. She has also written to other HUD officials, U.S. Sen. Sherrod Brown, U.S. Sen. Rob Portman and Rep. Steve Chabot to prevent the sale.
A new report from the state auditor found Cincinnati Public Schools (CPS) and Winton Woods City Schools were manipulating attendance data for the 2011-2012 school year, but the report seems to lay much of the blame on state policy, not just irresponsible school districts.
CPS and Winton Woods were cited among nine school districts by State Auditor Dave Yost for improperly withdrawing students from enrollment. More than 70 other schools had errors in their attendance reporting, but they were not found to be purposely manipulating — or “scrubbing” — attendance data.
The report largely focused on flaws in state policy that enable bad attendance reporting — particularly a single “count week” in October that encourages school districts to boost attendance during that one week and no other time in the school year.
“Kids count every day, all year long,” Yost said in a statement. “They deserve better than what we're giving them — Ohio's current system for measuring attendance and performance is obsolete and in too many places, filled with error and bad information and even outright fraud. It's amazing that it works at all, and sometimes, it doesn't.”
As a solution, Yost is calling on legislators to change school funding so it’s based on year-long attendance reporting.
The report also made 12 other recommendations, including increased oversight and monitoring, more programs for at-risk students, better training, use of automated data reporting, more accessibility to pertinent information for the Ohio Department of Education and clearer rules.
Winton Woods was one of the few schools to self-report issues to the auditor. Jim Smith, interim superintendent of Winton Woods, admits the school made mistakes and will make adjustments. But he says most of the issues were explained away as errors, not intentional data manipulation. Only four of the 15 issues couldn’t be reasonably explained, according to Smith.
Smith says the Education Management Information System (EMIS), which is used to report attendance data, is problematic for highly mobile
students, particularly in urban school districts. He argues the system
is too complicated and difficult to use for tracking such students.
In a Feb. 8 press release, Winton Woods claimed the reporting issues were related to confusion regarding expelled students, poor record keeping and a lack of well-defined procedures and reporting systems.
In an emailed statement, CPS Superintendent Mary Ronan wrote the school district made mistakes, but internal audits did not find evidence of data manipulation or scrubbing. She linked the errors to confusing state policy and issues with highly mobile students.
School attendance data is one of many ways states measure school performance, as required by the No Child Left Behind Act of 2001.
Update (Feb. 12, 10:29 a.m.): Originally, this story did not include comments from CPS. It was updated to reflect comments CityBeat obtained after publishing.
Hamilton County fares worse
than Ohio overall in a series of measurements for children’s
economic well-being, health, education and safety, according to a report released Aug. 7.
The 2013 “Ohio’s Kids Count” report from the Children’s Defense Fund and Annie E. Casey Foundation finds Hamilton County has a higher median income than Ohio does on average. But the county fares worse than the state in various categories, including childhood poverty, fourth-grade reading and math proficiency, felony convictions and the amount of babies with low birth weights, an early sign of poor health.
One example: Hamilton County’s childhood poverty rate is 27.7 percent, while Ohio’s overall rate is 23.9 percent. If the county brought the rate down to the state average, it would pull more than 3,000 local children out of poverty.
Hamilton County’s childhood poverty rate dropped from 28.5 percent to 27.7 percent between 2010 and 2011.
The report uses state data from between 2009 and 2011 to look at various indicators for children under the age of 18. Some of the data differs from findings from other groups, such as the National Center for Children in Poverty, which found about 48 percent of Cincinnati’s children are in poverty.
The report claims many of the measured indicators are socially and economically linked, so it should come as little surprise that Hamilton County is doing worse across the board. Still, it advises local, state and federal officials to continue taking action to bring down the troubling numbers.
In Cincinnati, City Hall has historically failed to meet its goals for human services funding, which in part helps homeless youth and other struggling children.
But local leaders, including city officials and business executives, have backed the Cincinnati Preschool Promise, which aims to place more low- and middle-income Cincinnati children in early education programs. Shiloh Turner, vice president for community investment at the Greater Cincinnati Foundation, today wrote in an email to CityBeat that Preschool Promise backers are currently looking at funding options and will iron out plans and partnerships through meetings scheduled for the next three months.
The Kids Count report credits Ohio officials in particular for approving a new voucher program that will subsidize preschool for families at or below 200 percent of the federal poverty level. The program is expected to reach 7,000 children in the state over the next two years.
But the state has generally cut education funding since Gov. John Kasich took office, leaving Cincinnati Public Schools with $15 million less state funding than it received in 2009.
At the same time, the federal government is set to cut its food stamp program in November, which progressive think tanks like the Center for Budget and Policy Priorities argue will hurt low-income families in Ohio.
State Sen. Tim Schaffer (R-Lancaster) is introducing legislation Thursday that would attach mandatory drug testing to welfare benefits, even though similar policies have proven to be costly with little gain in other states.
“It is time that we recognize that many families are trying to survive in drug-induced poverty, and we have an obligation to make sure taxpayer money is not being used to support drug dealers,” Schaffer told The Columbus Dispatch. “We can no longer turn a blind eye to this problem.”
Under the proposal, welfare recipients in three counties would be required to take a drug test if they admit in a questionnaire to using drugs in the past six months. Children, who make up a bulk of welfare recipients, would be exempt. (In June, 24,443 adults and 105,822 children obtained welfare benefits in Ohio, according to data from the Ohio Department of Job and Family Services.)
The policy, which was originally touted as a way to reduce welfare costs, has backfired in many states. That’s why the supporting line is now about preventing dollars from going to drug dealers instead of cost savings.
Deseret News reports the latest problems in Utah: “Utah has spent more than $30,000 to screen welfare applicants for drug use since a new law went into effect a year ago, but only 12 people have tested positive, state figures show.”
When Ohio legislators in 2012 proposed a drug testing requirement for welfare benefits, CityBeat reported another failure in Florida originally covered by The Miami Herald: In that state, the program had a net loss of $45,780 after it reimbursed falsely accused welfare recipients for their drug tests. Only 108 people out of the 4,086 accused, or 2.9 percent, tested positive, and most tested positive for marijuana.
Utah and Florida are among eight states that have enacted drug testing requirements for welfare recipients since 2011, according to the National Conference of State Legislatures.
A court placed an injunction on the Florida program after the American Civil Liberties Union sued on September 2011. That injunction was upheld on Feb. 26 by the Eleventh Circuit Court of Appeals in Atlanta, which concluded, “The simple fact of seeking public assistance does not deprive a TANF (welfare) applicant of the same constitutional protection from unreasonable searches that all other citizens enjoy.”
Given that Schaffer’s bill would require drug testing only after information is solicited through questionnaires, it’s unclear whether legal challenges like the one in Florida would be successful in Ohio.
Two Ohio senators, including Senate Minority Leader Eric Kearney of Cincinnati, are pushing a bill that will require the state’s Bureau of Motor Vehicles to grant driver’s licenses to the children of illegal immigrants. The senators claim state BMV offices are inconsistently applying President Barack Obama’s Deferred Action for Childhood Arrivals program, which allows the children of illegal immigrants to remain in the country without fear of prosecution, but the Ohio Department of Public Safety says the issue is still under review. CityBeat originally broke the story after hearing of Ever Portillo’s experiences at a Columbus BMV office here, and a follow-up story covered the internal conflict at the BMV over the issue here.
Ohio officials have said the state has only put $1 million toward JobsOhio, but records recently acquired by The Columbus Dispatch show $5.3 million in funding has been directed to the program
so far, and the public investment could be as high as $9 million. State
officials said the funding is necessary because constitutional
challenges, which the Ohio Supreme Court recently agreed to take up,
have held up the program’s original source of funding — state liquor
profits. JobsOhio is a nonprofit company established with the support of
Gov. John Kasich that’s meant to attract investment and bring jobs to
the state. Kasich says he wants to replace the Ohio Department of Development with the nonprofit company in the future.
City Council’s Budget and Finance Committee approved a plan to lease Cincinnati’s parking assets to the Port of Greater Cincinnati Development Authority in a 4-3 vote yesterday, but the plan will require five votes to become law in a final City Council vote tomorrow. The plan, which CityBeat previously covered, would lease the city’s parking assets to fund development projects, including a 30-story tower and a downtown grocery store, and help balance the deficit. The deal would produce a $92 million upfront payment, and the city projects that additional annual installments would generate more than $263 million throughout the lease’s duration. Critics are worried the city will give up too much control of its parking assets as part of the deal, and concerns about the city’s long-term deficits remain. The alternatives — plans B, C and S — would fix structural deficit problems, while the budget only helps balance the deficit for the next two fiscal years.
The company that will operate Cincinnati’s parking meters if the parking deal is approved by City Council had problems in the past, according to a tip received by multiple news outlets from Tabitha Woodruff, an advocate at Ohio Public Interest Research Group. The issues surfaced years before Affiliated Computer Services (ACS) was bought by Xerox in 2010, and Xerox now denies any wrongdoing. One of the issues is a 2007 audit, which found ACS mismanaged parking meters in Washington, D.C. Kevin Lightfoot, a spokesperson at Xerox, says the audit was based on “faulty information,” and a lot of the problems found were because the auditor improperly read parking meter screen displays.
An approved commitment by the Hamilton County Transportation Improvement District (HCTID) may ensure a rail service is ready for Cincinnati in time for the 2015 Major League Baseball All-Star Game. Hamilton County Commissioner Todd Portune is pushing for local and state governments to break down any barriers for Oasis Rail Transit, which will carry passengers from Downtown to Milford.
The Ohio Board of Education will decide between two candidates for state superintendent next week: acting Superintendent of Public Instruction Michael Sawyers or Dick Ross, Gov. John Kasich’s top education adviser.
After years of development and anticipation, Cincinnati’s Horseshoe Casino opened yesterday. The casino comes with the promise of jobs and economic development, but it also poses the risk of crime, bankruptcy and even suicide. State and local legislators are also looking forward to extra government revenue from the casino, even though casino revenue around the state has fallen short of projections. For Over-the-Rhine residents, the grand opening, which culminated in a fireworks display, was sort of like being in the middle of a thunderstorm.
Livability.com named Cincinnati the No. 10 spring break destination because of the Cincinnati Zoo, Botanical Garden, IKEA, Cincinnati Art Museum, the 21c Museum Hotel, Newport Aquarium and the Clifton Cultural Arts Center, among other places and family-friendly activities.
Science doesn’t want pregnant women to be capable of anything.
Here are two pictures of Venus from Saturn’s view.
City Council’s Budget and Finance Committee today approved a
plan to lease Cincinnati’s parking assets to the Port of Greater
Cincinnati Development Authority in a 4-3 vote, but the plan will require five votes to become law in a final City Council vote on March 6.
Council members Roxanne Qualls, Yvette Simpson, Cecil Thomas and Wendell Young voted for the plan, and council members Chris Seelbach, Chris Smitherman and Charlie Winburn voted against it. Councilman P.G. Sittenfeld was absent, and Councilwoman Laure Quinlivan abstained, although she said she could vote yes if she sees more details about how the city will curb its long-term budget problems.
The plan, which CityBeat previously covered (“Parking Stimulus,” issue of Feb. 27), would lease the city’s parking assets to fund development projects, including a 30-story tower and a downtown grocery store, and help balance the deficit for the next two fiscal years. The deal would produce a $92 million upfront payment, and the city projects that additional annual installments would generate more than $263 million throughout the lease’s duration.
Before the vote, several City Council members said the parking plan would not solve Cincinnati’s structural deficit problems, but City Manager Milton Dohoney Jr. said the plan would help reduce the deficit by generating recurring revenues through long-term economic growth and development.
“The situation that we’re in requires that we accelerate
growth right now, not later,” he said. “If we do not do that, then we’re going to
have further negative ramifications to deal with.”
Still, Dohoney admitted the plan would not solve all the city’s budget woes — just like he has repeatedly said in the past. Even with the parking plan, the city projects a $10 million deficit in 2014, $15.5 million deficit in 2015 and $20 million deficit in 2016.
The council members insisted there are alternatives to the parking plan and Dohoney’s Plan B, which would lay off 344 employees, eliminate Human Services Funding and close pools and recreation centers, among other changes.
On March 1, Seelbach proposed Plan S, which would not lease the city’s parking assets to balance the budget and would instead use $7.5 million in casino revenue, cut $5 million based on the results of the city's priority-driven budgeting and allow voters to choose between a $10-per-month trash fee or a 2-percent increase in the city's admissions tax.
On the same day as the hearings, Winburn, the sole Republican on City Council, proposed Plan C, which would reduce city employees’ salaries across the board — with exemptions for police, ﬁre, health, garbage, recreation, parks and road paving — and use casino and parking revenue to clear the deficit.
At the City Council hearings, Quinlivan listed a few other
possibilities, including sharing public safety services with other
local communities. She also advised the city to put together a long-term deficit reduction plan. “We don’t want to kick the can down the road any more,” she said.
Thomas suggested putting an earnings tax hike of 0.1 percent or 0.2 percent on the ballot. He said, “It would solve this (deficit) problem once and for all.”
Some council members also raised concerns about the release of bond documents, which will further detail the framework of the parking agreement. Dohoney and Laura Brunner, president of the Port Authority, said the bond documents have not been crafted because a lease agreement has to be approved by City Council first, but the documents will be made public once they are put together.
Before the final committee vote, Smitherman successfully
motioned to separate part of the parking plan from the budget, which opens the plan to referendum. The motion was in response to City Solicitor
John Curp, who said appropriation ordinances, or ordinances that are essentially budgets, aren’t subject to
referendum, according to state law.
Cincinnati, Hamilton County and Greater Cincinnati experienced dramatic drops in the seasonally unadjusted unemployment rate between January and February, according to new data released by the Ohio Department of Job and Family Services (ODJFS).
In Cincinnati, the seasonally unadjusted unemployment rate dropped to 7.5 percent in February, down from 8.6 percent in January. The civilian labor force, which measures the amount of people working and seeking jobs, also dropped from 139,400 to 138,900, which means less people were looking for work. The amount of people employed rose from 127,400 to 128,600 and the amount of people unemployed dropped from 12,000 to 10,300.
At the county level, the civilian labor force remained steady, while the seasonally unadjusted unemployment rate dropped from 7.9 percent in January to 7.1 percent in February. Across all of Greater Cincinnati, the unemployment rate dropped from 8 percent to 7.4 percent, even as the civilian labor force grew by 1,300 — a sign that more people in the region are looking for work.Michael Jones, research director at the University of Cincinnati Economics Center, says the report was encouraging and consistent with the past few years’ trends: “We’ve seen a lot of activity in the Cincinnati area. We know a few companies have been actively growing their businesses.”
The gains were also improvements in a year-over-year comparison. In February 2012,
Cincinnati’s seasonally unadjusted unemployment rate was 8.4 percent,
Hamilton County’s rate was 7.8 percent and Greater Cincinnati’s rate was
8.2 percent. The civilian labor force was also larger in
Cincinnati, Hamilton County and Greater Cincinnati in February 2012, but less people were employed across-the-board.
Jones says looking at employment numbers is a much better way to gauge economic health than looking at the size of the civilian labor force. While employment purely measures job growth, the civilian labor force can be driven by demographic changes — including an aging, retiring population — and people going back to school full-time, according to Jones.
In February, Ohio’s seasonally unadjusted unemployment rate was 7.6 percent, and the U.S. seasonally unadjusted unemployment rate was 8.1 percent.
Jones says Cincinnati and Ohio are poised to continue strong growth: “We have a strong health care sector. As health care continues to be an important component of our economy, … Cincinnati is very well positioned to capture that growth.”
State and federal numbers are typically adjusted to account for seasonal employment patterns, while local numbers are not.
Unemployment numbers are calculated through a household survey. The unemployment rate gauges the amount of unemployed people looking for work in contrast to the total civilian labor force. Since the numbers are derived from surveys, they are often revised in later months.
Update (3:54 p.m.): This story was updated with comments from Michael Jones, research director at the University of Cincinnati Economics Center.