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by German Lopez 07.16.2013
Posted In: News, Budget at 12:49 PM | Permalink | Comments (0)
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City Debt Outlook Worsens

Officials blame Moody’s downgrade on methodology changes, state policy

It might cost Cincinnati more to issue debt following a credit rating downgrade by Moody’s. In a report released on July 15, the credit ratings agency downgraded the city’s general bonds from Aa1 to Aa2 and revised the bonds’ outlook to “negative.”

The negative outlook reflects the expectation that the city will continue to face challenges in attaining structurally balanced operations, stemming from its unfunded pension liabilities and reliance on a number of one-time budgetary solutions in recent years,” the report reads.

In a memo to the mayor and City Council, City Manager Milton Dohoney put the blame on Moody’s methodological changes that now account for state pension funds that Cincinnati has no direct control over. Specifically, Moody’s now looks at the state-managed Ohio Public Employees Retirement System (OPERS) and Ohio Police and Fire Retirement System (OP&F) when scoring Cincinnati, instead of just the Cincinnati Retirement System (CRS), which the city directly operates.

“It is important to note the Ohio Revised Code provides the percentage each employer pays into OPERS and OP&F as its contribution. The City has paid 100 (percent) of this contribution each year as required. The City has no ability to impact the unfunded liability of OPERS or OP&F,” Dohoney wrote in the memo.

Still, some of the blame lies on the city’s pension fund, which is lacking a long-term strategy for sustainability, according to Moody’s.

The CRS board is currently looking at scenarios to address the city’s long-term liabilities. Its next meeting is on Aug. 1, and it could produce changes that would be presented to City Council, according to the city manager’s memo.

The report also takes issue with the city’s repeated use of one-time sources to fix budget gaps. Since 2001, the city’s annual operating budgets have used one-time sources instead of achieving structural balance with long-term cuts and sources of revenue.

Critics argue the one-time sources only delay fiscal woes instead of permanently fixing the budget shortfalls. Supporters claim the one-time methods allow the city to balance its budget without taking austere measures that would lead to city layoffs and hurt growth while the economy is in recovery.

Moody’s also claims the city has relatively weak socioeconomic indicators, particularly resident income levels and historical unemployment rates.

The report from Moody’s does give Cincinnati some good credit, citing a “pressured but still satisfactory financial position,” the recent stabilization of earnings taxes, financial flexibility provided by an available but untapped levy authority, the city’s economically diverse population and an above-average debt position.

Bonds are typically issued when the city needs a temporary infusion of funds for capital projects, such as the Cincinnati streetcar.

Updated with more context.

by German Lopez 04.29.2013
Posted In: News, Budget, Streetcar at 09:18 PM | Permalink | Comments (0)
city hall

City Manager Defends Streetcar Project

Council meeting covers streetcar's costs, benefits

Convening in packed City Council chambers today, Cincinnati officials discussed the costs and benefits of the streetcar project in light of a $17.4 million budget gap revealed by the city administration on April 16. City Manager Milton Dohoney Jr. said the project could and should be saved, but a minority of public speakers and some City Council members did not seem convinced.

To balance the budget gap, Dohoney said the city would have to pull funds from multiple sources. He said he will offer specifics in writing tomorrow, which invoked verbal disappointment from officials who were expecting details at the meeting.

“I'm disappointed in this presentation,” said Councilman Chris Smitherman. “We're here today to hear how we're going to pay for it.”

The meeting, which was called by Democratic Vice Mayor Roxanne Qualls shortly after the budget shortfall was announced, covered a presentation from Dohoney, comments from public speakers and City Council questions to Dohoney. Despite expectations prior to the meeting, no specifics were given for closing the budget gap even after extensive questioning.

Dohoney did reveal the price tag for halting the streetcar project: $72 million. According to Dohoney, the project has already cost the city $19.7 million, and the city would have to spend another $14.2 million in close-out costs. Another $38.1 million in federal grants would have to be returned to the federal government.

Dohoney added that terminating the project would also reduce faith in Cincinnati’s competitiveness and ability to take on big development projects.

The budget gap was originally $22.7 million, but the city administration identified $5.3 million in potential cuts. Dohoney said further cuts would “alter the scope” of the project and push it into a “danger zone.”

The budget gap is a result of construction bids coming in $26 million to $43 million over budget. The lowest bid from Messer Construction, which came in $26 million over budget, has already expired, but Dohoney said the company is still willing to work on the streetcar project.

The city could rework the request for proposal for construction bids, but Dohoney said city officials and third-party experts agreed it’s unlikely that would effectively lower costs.

Throughout the meeting, streetcar opponents argued that the cost of the project is too high and the budget shortfall is proof the program is unsustainable.

Most of Dohoney’s presentation focused on the streetcar’s purpose. He said the streetcar would help drive economic and population growth, which would then bring in more tax revenue to help balance the city’s operating budget. That would represent a turnaround for Cincinnati, which has been steadily losing population since the 1950s during a period that has coincided with disinvestment, urban flight and the dissolution of the city’s old streetcar system.

Throughout his presentation, Dohoney cited multiple examples and studies that found streetcars can help grow local economies. He said the city has not pursued the streetcar because “it’s a cool thing to do,” but because it follows the expert advice given to city officials about what’s necessary to compete with other cities.

Dohoney’s argument was previously supported by HDR, which the city hired to do an economic impact study in 2007. HDR found major benefits to connecting Over-the-Rhine and the Central Business District, including travel cost savings, increased mobility for low-income individuals and economic development that would spur rising property values. The HDR study was entirely supported and echoed by a follow-up assessment from the University of Cincinnati.

Some critics have argued that the study is outdated because it was conducted before Over-the-Rhine’s recent revitalization, but Dohoney said there are still several hundred vacant buildings in the area, particularly north of Liberty Street.

The project has faced continued opposition from Democratic mayoral candidate John Cranley, Republicans and the conservative Coalition Opposed to Additional Spending and Taxes (COAST). They say the project is too expensive and they’re skeptical of the economic growth being promised by city officials.

Opponents of the streetcar have so far put the project on the ballot twice, but Cincinnati voters rejected the referendum efforts. Still, the streetcar may be on the ballot again this year through the 2013 mayoral race between Democrats Cranley and Qualls (“Back on the Ballot,” issue of Jan. 23). Cranley opposes the streetcar, while Qualls supports it.

The streetcar project was originally supposed to receive $52 million in federal funds through the state government, but Republican Gov. John Kasich pulled the funds after he unseated Democratic Gov. Ted Strickland.

Beyond the financial cost, Dohoney pointed out Kasich’s decision raised concerns about the project’s feasibility among previous supporters, leading to more hurdles and delays. He said Duke Energy in particular began stalling efforts to move utility lines to accommodate for streetcar tracks because the company grew weary of the project’s prospects.

Duke’s reluctance led to a conflict with the city over who has to pay to move utility lines — a conflict Duke and the city agreed to resolve in court. While the court battles play out, the city set aside $15 million from the Blue Ash Airport deal to move utility lines, but city officials say they will get that money back if the courts side with the city.

The city originally expected $31 million in private funding for the streetcar project, but those expectations were dampened as a result of the Great Recession, which forced local companies to scale back private donations.

John Deatrick, the current project manager for The Banks, previously told CityBeat that it’s normal for large projects to deal with multiple hurdles. Deatrick, who the city wants to hire to manage the streetcar project, said, “Any time you try to build something — even out in the middle of a corn field — you’re going to have unexpected, unanticipated issues. ... These things happen, and that’s what project management is all about.”

Dohoney said the current phase of the streetcar project is only a starter line between Over-the-Rhine and Cincinnati’s business district, but city officials are already planning for a second line that would run up to the University of Cincinnati and hospitals in uptown. If Dohoney’s vision for the project were completed, streetcars would run on multiple lines all around the city, ranging from the Cincinnati Zoo to The Banks.

The streetcar budget debate comes amid another debate regarding a $35 million deficit in the city’s operating budget. Some streetcar opponents have tried to link the two issues, but the streetcar is funded through the capital budget, which cannot be used to balance the operating budget because of legal and traditional constraints.

by German Lopez 06.06.2013
Posted In: News, Budget, Abortion, Education at 03:40 PM | Permalink | Comments (0)
ohio statehouse

Ohio Senate Approves Budget with Anti-Abortion Measures

Plan also cuts taxes for businesses, restores some education funding

In a party line 23-10 vote today, the Republican-controlled Ohio Senate approved a $61 billion budget plan for fiscal years 2014 and 2015 that takes multiple measures against legal abortions, aims to cut taxes for small businesses and partly restores education funding cut in the previous 2012-2013 budget.

The budget plan gives a large amount of attention to social issues, particularly abortion. Most recently, the Ohio Senate added an amendment that could be used by the director of the Ohio Department of Health to close down abortion clinics.

The amendment bans abortion clinics from establishing transfer agreements with public hospitals, forcing the clinics to make such agreements with private hospitals, which are often religious and could refuse to deal with abortion clinics. Under the amendment, if the clinics can’t reach a transfer agreement, the state health director is given the power to shut them down.

Abortion rights groups claim the amendment will likely be used to shut down abortion clinics or force them to dissolve their abortion services.

The bill also makes changes to family services funding that effectively defund Planned Parenthood, a family planning services provider that is often criticized by conservatives for offering abortion services, even though it does so exclusively through private donations.

The bill also redirects some federal Temporary Assistance for Needy Families funds to crisis pregnancy centers, which effectively act as the anti-abortion alternative to comprehensive family planning service providers like Planned Parenthood.

The changes continue a conservative push on social issues that began in the Ohio House budget (“The Chastity Bunch,” issue of April 24).

Supporters praise the bill for protecting life and promoting “chastity” and abstinence,” but critics are pushing back.

Today the Ohio Senate turned its back on the health care needs of Ohio’s women and paved the way for family planning centers and abortion clinics to be closed across the state. If Gov. (John) Kasich doesn’t remove these provisions from the budget, the unintended pregnancy rate will rise, cancer will go undetected and women who need abortion care will not have safe, legal facilities to turn to in some communities,” said Kellie Copeland, executive director of NARAL Pro-Choice Ohio, in a statement. “This budget will put the lives of thousands of Ohio women at risk if Gov. Kasich fails to line-item veto these dangerous measures.”

The Ohio Senate plan also scraps Ohio House plans to cut income taxes for all Ohioans by 7 percent and instead aims to cut taxes for small businesses by 50 percent.

Republicans claim the tax cut will help small businesses, which they call the state’s “job creators.” But conservative and liberal groups have criticized the plan.

In an analysis, Policy Matters Ohio, a left-leaning policy think tank, claimed the tax cut will inadvertently benefit “affluent passive investors” and “partners in law firms and other partnerships.”

Given that, Zach Schiller, research director at Policy Matters, says the plan will do little for Ohio’s economy.

“The fastest growing small businesses are not making money because they’re investing heavily in their operations — in marketing, research and sales,” Schiller says. “So if they’re making anything, they’re investing it by and large in the business, so they’re not likely to be able to benefit very much from this.”

He adds, “Meanwhile, you’re going to have passive investors who have no role in adding employees and partners in law firms, architecture firms, accounting firms and other kinds of professional organizations who will personally benefit from this in a way that I think is unlikely to generate more employment.”

Instead of focusing on tax cuts, Schiller argues the state should be increasing direct investments, particularly in education and human services.

The conservative Tax Foundation echoed some of Schiller’s criticisms in a blog post.

“This is bad policy, and many supporters are errantly pushing it under the guise of putting more money in the hands of ‘job-creators.’ But this is based on a flawed understanding of what creates jobs,” wrote Scott Drenkard of the Tax Foundation. “The businesses that actually create jobs are not small businesses or big businesses; they are businesses that are growing. And that type of business is virtually impossible to target with a tax incentive.”

The budget plan restores about $717 million in education funding, but that’s not enough to outweigh the $1.8 billion in education funding that was cut in the 2012-2013 budget, which Kasich and the Republican-controlled legislature approved in 2011.

The education funding increases will disproportionately favor the state’s property-wealthiest districts — effectively giving the biggest funding increases to school districts that can already afford to raise more money by leveraging high local property values.

Stephen Dyer, an education policy fellow at the left-leaning Innovation Ohio, captured the disproportionate funding increases in chart form in a blog post:

The chart shows only 15 percent of funding increases will go to the property-poorest one-third of school districts, while a vast majority of the increases will go to the property-wealthiest one-third.

Health care advocates were also disappointed to see the Ohio Senate pass on a federally funded Medicaid expansion, which would allow anyone at or below 138 percent of the federal poverty level — $15,856 for a single-person household and $32,499 for a family of four — to enroll in the government-backed health care program.

Kasich proposed expanding Medicaid in his original budget plan (“Smoke and Mirrors,” issue of Feb. 20), but Ohio legislators are skeptical of the expansion’s consequences.

As part of the Affordable Care Act (“Obamacare”), the Medicaid expansion would be fully financed by the federal government for the first three years. After that, federal payments would be phased down to capture 90 percent of the expansion, where federal funding would permanently remain.

Republican legislators, backed by Republican State Treasurer Josh Mandel, are skeptical the federal government can afford the expansion. There’s no historical precedent for the federal government failing to meet its obligations to Medicaid, but Republican legislators argue there’s also no historical precedent for the federal government backing such large Medicaid expansions across the nation.

A Health Policy Institute of Ohio study found the Medicaid expansion would save the state $1.8 billion and insure nearly half a million Ohioans over the next decade.

The budget also fails to restore local government funding cuts that have been carried out during Kasichs time in office. In comparison to fiscal years 2010 and 2011, local governments are receiving about 50 percent less aid from the state, leading to $22.2 million less funds for Cincinnati on an annual basis (Enemy of the State, issue of March 20).

When asked to explain the various cuts to education and local government funding in the 2012-2013 budget, Kasich spokesperson Rob Nichols told CityBeat in September 2012, “The reality is we walked into an $8 billion budget deficit. … We had to fix that.”

The Ohio legislature and Kasich must agree on a budget plan in time for a June 30 deadline.

by German Lopez 06.20.2013
Posted In: News, Budget, Taxes at 03:28 PM | Permalink | Comments (0)
ohio statehouse

Final State Budget to Cut Income Taxes, Raise Sales Tax

Tax plan also creates earned income tax credit, changes property taxes

Republican state legislators today rolled out a major tax overhaul that would cut Ohio income taxes, but the plan would also increase and expand sales and property taxes.

Legislators plan to add the tax changes to the $61.7 billion two-year budget. The final plan is being touted as a merger of the original proposals from the Ohio House and Senate, but none of the proposed tax hikes in the revised plan were included in the original tax proposals from either chamber.

Relative to rates today, the new plan would cut state income taxes across the board by 8.5 percent in the first year of the budget’s implementation, 9 percent in the second year and 10 percent in the third year. That’s a bump up from the House plan, which only included a 7-percent across-the-board income tax cut.

The Senate’s 50-percent tax deduction for business owners would be reduced to apply to up to $250,000 of annual net income, down from $750,000 in the original plan. Under the revised plan, a business owner making a net income of $250,000 a year would be able to exempt $125,000 from taxes.

The plan would also create an earned income tax credit that would give a tax refund to low- and moderate-income working Ohioans.

To balance the cuts, the plan would hike the sales tax from 5.5 percent to 5.75 percent. Some sales tax exemptions would be eliminated, including exemptions for digital goods such as e-books and iTunes downloads.

The plan would also make two major changes to property taxes: First, the state would not pay a 12.5-percent property tax rollback on new property tax levies, which means future levies for schools, museums and other services would be 12.5 percent more expensive for local homeowners.

Second, the homestead tax exemption, which allows disabled, senior and widowed Ohioans to shield up to $25,000 of property value from taxes, would be graduated over time to be based on need. In other words, lower-income seniors would still qualify for the exemption, while higher-income seniors wouldn’t. Current exemptions would remain untouched, according to House Finance and Appropriations Committee Chairman Ron Amstutz.

The final tax plan is a lot closer to Gov. John Kasich’s original budget proposal, which left-leaning Policy Matters Ohio criticized for disproportionately favoring the wealthy (“Smoke and Mirrors,” issue of Feb. 20).

The budget must now be approved by the conference committee, House, Senate and Gov. John Kasich in time for a June 30 deadline.

by German Lopez 05.16.2013
Posted In: Budget, News at 12:33 PM | Permalink | Comments (1)
city hall

Motion to Eliminate Fire Layoffs, Reduce Police Layoffs to 25

Qualls, Seelbach propose budget plan that would avert layoffs despite months of warnings

A budget plan proposed by two council members today would eliminate layoffs at the fire department and reduce the amount of police layoffs to 25, down from 49, by making cuts elsewhere, particularly by forcing city employees to take 10 furlough days in fiscal year 2014.

Council members Roxanne Qualls and Chris Seelbach are co-sponsoring the motion. If it's approved by City Council, the amount of city employee layoffs in the fiscal year 2014 budget would drop to 84, down from the original "Plan B" estimate of 344, by amending Mayor Mark Mallory's budget proposal, which was announced yesterday.

The news is being well received by public safety advocates, but it's also vindication for some of the city's harshest critics. Democratic mayoral candidate John Cranley previously said the city was acting like "the boy who cried wolf" by suggesting it had to lay off 344 city employees, including 80 firefighter and 189 police positions.

"In 2009, 2010, 2011 and 2012 … they threatened to lay off police and firefighters, and it never happened," Cranley previously told CityBeat.

But avoiding the layoffs comes with large cuts and shifted priorities elsewhere: Furlough days for supervisory and leadership personnel would be bumped up from five to 10 ($250,000 in savings), all council members would be asked to take 10 furlough days ($22,700), City Council's office budgets would be reduced ($18,000), the clerk of council's office budget would also be reduced ($46,000), the departments of community development and economic development would be merged ($171,000) and the account for firefighter's protective gear would be reduced ($100,000). In total, the cuts in the motion add up to $607,000.

The cuts would be in addition to larger cuts proposed by the city manager and mayor, which include reduced funding to parks, human services, parades and outside agencies.

The motion will be formally introduced at tonight's Budget and Finance Committee meeting, which will also act as a public hearing for budget issues. The hearing will begin at 6:30 p.m. at the Duke Energy Convention Center.

The layoff reductions come after the city manager and mayor spent a bulk of the past six months repeatedly warning that the city would have to carry out significant public safety layoffs if the city didn't lease its parking assets to the Port Authority. That plan would have opened up funds to help balance the budget for two years and pay for economic development projects, including a downtown grocery store ("Parking Stimulus," issue of Feb. 27).

But the parking plan is now held up in court, and the city is apparently able to avoid most of the layoffs despite the repeated warnings.

The city must enact a budget by May 31, which will give the city the required 30 days to implement the plan by fiscal year 2014, which begins July 1.

by German Lopez 06.21.2013
Posted In: News, Budget, Streetcar at 02:19 PM | Permalink | Comments (3)

Feds Commit Another $5 Million to Streetcar Project

City Council expected to vote on budget updates Monday

Cincinnati's streetcar project is getting another $5 million in federal funding. But before the money is handed over, the city must first eliminate cost overruns that have recently put the project in danger.

U.S. Secretary of Transportation Ray LaHood unveiled the news in a letter to Mayor Mark Mallory dated June 19. The letter acknowledges the project's recent cost overruns, but goes on to claim the federal government still backs the project.

"The DOT (Department of Transportation) continues to support your bold vision for economic development and enhanced transportation choices for the city of Cincinnati, and we believe that this project is a significant component of that vision. With that in mind, I want to provide up to $5 million in additional assistance from DOT," LaHood wrote.

But the money comes with two conditions: The city must first fix the streetcar project's cost overruns and restore certain aspects of the project, including a passenger information system and a screen or wall that would block power substations from public view.

The $5 million will be on top of the nearly $40 million the federal government has already contributed to the project through various grants and programs.

The funding bump comes just in time for City Council's Monday vote on the streetcar project's cost overruns.

In February, the city received construction bids that were $26 million to $43 million over budget, effectively leading to a $17.4 million budget gap and a $133 million overall cost for the project.

Since then, City Manager Milton Dohoney proposed a few fixes to City Council, including pulling funding from various capital projects and issuing more debt.

At the same time, Dohoney told City Council the city administration was working with federal officials to find opportunities for more federal funding. The new commitment is presumably the result of those discussions.

City Council is expected to vote on the budget fixes Monday. So far, council members Roxanne Qualls, Yvette Simpson, Wendell Young and Laure Quinlivan have vowed support, but Council will need a fifth vote — perhaps from Chris Seelbach or Pam Thomas — to pass the changes.

Read the full letter below:

   Streetcar Letter to Mayor Mallory

Update (3:55 p.m.): This story was updated with additional context.

by German Lopez 05.29.2013
Posted In: News, State Legislature, Budget at 12:51 PM | Permalink | Comments (0)
ohio statehouse

Ohio Senate Budget Keeps Conservative Issues at Forefront

Bill would cut taxes for small businesses, not other Ohioans

Ohio Senate Republicans unveiled a budget plan yesterday that would keep social issues at the forefront and refocus tax reforms on small businesses instead of all Ohioans.

The budget plan would potentially allow Ohio's health director to shut down abortion clinics, effectively defund Planned Parenthood, fund anti-abortion crisis pregnancy centers and forgo the Medicaid expansion.

The plan would also cut income taxes by 50 percent for businesses owners while undoing a 7-percent across-the-board income tax cut for all Ohioans.

Republicans say the tax cuts will spur the state's economy, but Democrats were quick to argue the tax cuts will exclude a majority of Ohioans, particularly low- and middle-income earners.

The small business tax cut was originally proposed by Gov. John Kasich alongside a 20-percent across-the-board tax cut for all Ohioans, but the Ohio House undid both suggestions in its own budget plan in favor of a 7-percent across-the-board income tax cut.

Meanwhile, the conservative push on social issues echoes priorities established in the Ohio House budget bill, which was passed on April 18 ("The Chastity Bunch," issue of April 24).

But the Ohio Senate plan comes with a new addition: It would give the director of the Ohio Department of Health the power to close ambulatory surgical centers without cause, which could be "a thinly veiled tool to close abortion clinics and effectively outlaw abortion across the state," according to NARAL Pro-Choice Ohio.

The other Ohio Senate measures are drawn from the Ohio House budget bill, including a rework of family services funding that prioritizes other programs over Planned Parenthood, leading to less funds for the controversial women's health program.

The change has been trumpeted by Republicans who claim it will allow more programs to get funding. But the cuts have been criticized by Planned Parenthood advocates, who say other programs already compete for family planning services funding; those programs are just dismissed as inferior under the current competitive distribution process.

The Ohio Senate budget plan would also shift a separate set of funds to crisis pregnancy centers (CPCs), which essentially act as the anti-abortion alternative to family planning institutions like Planned Parenthood.

Supporters of CPCs, including Denise Leipold of Right to Life of Northeast Ohio, praise them for promoting "chastity" and "abstinence."

But CPCs have been criticized by pro-choice groups for misleading women about false links between abortion, breast cancer, mental health problems and infertility. An "undercover investigation" from NARAL Pro-Choice Ohio found 47 percent of CPCs gave misleading information about abortions and mental health problems and 48 percent gave false information about abortions, breast cancer and infertility.

NARAL Pro-Choice Ohio criticized the measures in a statement.

"Just when you thought the budget couldn’t get any worse for Ohio women, it does," said Kellie Copeland, executive director of NARAL Pro-Choice Ohio, in a statement. "This budget attacks every choice a woman can make about her reproductive health.  If she wants to avoid an unplanned pregnancy, her family planning provider may be defunded. If she gets pregnant when she is unable to become a parent, the abortion clinic in her community may be shuttered.  If she chooses to become a parent and needs assistance to provide for her child, funding may no longer be available. Gov. Kasich can stop these attacks on women’s health care. We need him to pledge to line-item veto these dangerous measures when they reach his desk."

Just like the Ohio House budget plan, the Ohio Senate's plan also forgoes the Medicaid expansion. Kasich and Ohio Democrats have supported the expansion, but the Republican majority in the legislature has so far stood in opposition.

The expansion would use mostly federal funds from the Affordable Care Act ("Obamacare") to increase the eligibility cut-off for Medicaid to 138 percent of the federal poverty level. The first three years would be completely paid by the federal government. Afterward, federal funding would be phased down to 90 percent over the next decade, where it would remain.

A study from the Health Policy Institute of Ohio found the expansion would insure nearly half a million Ohioans and save the state money in the next decade.

Despite staunch opposition in budget talks, Republicans have introduced a standalone bill that would expand and reform Medicaid, which Republicans say will let them take a more "holistic" approach to the health care program.

The Ohio Senate budget plan also pulled out controversial language that would have forced public universities and colleges to decide between $370 million in higher out-of-state tuition rates and providing out-of-state students with documents required for voting in Ohio.

If the budget plan is approved by the Ohio Senate, it will head to the Ohio House and Kasich for final approval.

Update (1:51 p.m.): This story was updated with comments from NARAL Pro-Choice Ohio.

by German Lopez 03.28.2013
Posted In: Budget, Parking, News at 10:43 AM | Permalink | Comments (1)
downtown grocery

Judge Orders Permanent Injunction on Parking Plan

City may have to make cuts to balance 2014 budget

In a ruling today, Hamilton County Judge Robert Winkler said the city will have to allow for a referendum on the parking plan and imposed a permanent injunction pending the outcome of a referendum.

The ruling means the city may be unable to rely on the parking plan to balance fiscal year 2014’s budget, and the city may be forced to find cuts elsewhere by July 1, when the new budget will kick in.

The ruling may be appealed, but City Solicitor John Curp says he is not aware of any filing yet. He says Mayor Mark Mallory and the city administration plan to hold a press conference later this afternoon to discuss the ruling in further detail.

For opponents of the parking plan, the ruling comes as a big victory that will allow them to put the parking plan on the ballot if they gather enough eligible petition signatures by April 5.

For the city, the ruling potentially leaves a $25.8 million hole in the 2014 budget.

When the restraining order was extended for two weeks on March 20, city spokesperson Meg Olberding told CityBeat the delays were causing the city to approach a “pressure point”: We respect the court's right to do that (the extension), and know that every day that we cannot make the parking deal happen is a day that we are closer to having to lay people off.

In the past, City Manager Milton Dohoney Jr. said the plan will force the city to lay off 344 employees, including 80 firefighter and 189 police positions.

But opponents argue there are ways to solve the budget without laying people off. As an alternative to the parking plan, Councilman Chris Seelbach proposed Plan S, which would redirect $7.5 million in casino revenue to help balance the deficit, cut $5 million based on the results of the city's priority-driven budgeting process and put two charter amendments on the ballot that, if approved, would include up to a $10-per-month trash fee and increase the city's admissions tax by 2 percent.

City Council approved the parking plan on March 6 to lease the city’s parking assets to the Port of Greater Cincinnati Development Authority to help balance the budget for the next two fiscal years and fund more than $100 million in development projects, including the creation of a downtown grocery store and more than 300 luxury apartments ("Parking Stimulus," issue of Feb. 27).

Opponents of the parking plan say they’re concerned the city will cede too much control over its parking assets and cause parking rates to skyrocket. The city says rate increases are initially capped at 3 percent or inflation — whichever is higher.

But the rates can change with a unanimous vote from a special committee, approval from the city manager and a final nod from the Port Authority. The special committee would comprise of four people appointed by the Port Authority and one appointed by the city manager.

The ruling comes after the city and opponents of the parking plan met in court on March 15 to discuss whether the plan is subject to referendum.

Curt Hartmann, an attorney who represents the Coalition Opposed to Additional Spending and Taxes (COAST) and opponents of the parking plan, said the city charter is vague on its definition of emergency clauses, and legal precedent supports siding with voters right to referendum when there is ambiguity.

The city cited state law to argue emergency clauses, which remove a 30-day waiting period on legislation, eliminate the possibility of referendum. Terry Nestor, who represented the city, said legal precedent requires the city to defer to state law as long as state law is not contradicted in the city charter.

With his decision, Winkler sided with opponents of the parking plan. He wrote in the ruling, “If the people of Cincinnati had intended to exempt emergency legislation from their referendum powers, they could have done so when adopting Article II, Section 3 of the City Charter.”

The parking plan is one of the few issues dividing Democratic mayoral candidates John Cranley and Vice Mayor Roxanne Qualls. Cranley opposes the plan, while Qualls supports it.

by German Lopez 06.28.2013
Posted In: News, Health care, Budget at 03:39 PM | Permalink | Comments (0)

State Budget Rejects Medicaid Expansion

But Medicaid funding increased by $1 billion

Despite strong backing from Republican Gov. John Kasich, the Medicaid expansion didn’t make it into the final version of the two-year state budget passed by the Republican-controlled General Assembly on Thursday.

Col Owens, co-convener of the Southwest Ohio Medicaid Expansion Coalition, calls the expansion’s failure a disappointment, but he says he remains optimistic the expansion will be taken up in future legislation.

Under the Affordable Care Act (“Obamacare”), the federal government is asking states to expand their Medicaid programs to 138 percent of the federal poverty level, or an annual income of $32,499 for a family of four.

States are given a powerful financial incentive for doing so: For the first three years, the expansion is entirely paid for by the federal government. Afterward, the federal commitment is dropped to 90 percent, where it will indefinitely remain.

The federal government on average pays about 57 percent of Medicaid costs, while states pay for the rest. So the 90-percent match for the expansion is a uniquely lucrative deal.

But Republican legislators say they’re skeptical the federal government can afford such a large commitment to Medicaid, often calling the size of the expansion unprecedented.

Owens claims there is a precedent for the Medicaid expansion: Medicaid. He says the federal government has historically upheld its commitment to Medicaid, which insures 2.2 million Ohioans. There’s no sign that will stop any time soon, according to Owens.

To support his claim, Owens cites scoring from the Congressional Budget Office (CBO), a nonpartisan organization that scores federal policy proposals to gauge their fiscal and economic impact. In July 2012, the CBO found repealing Obamacare, which includes the Medicaid expansion, would actually increase the federal deficit by $109 billion over 10 years, which means the health reform law is an overall fiscal gain for the federal government.

At the same time, analysts have found the Medicaid expansion would be fiscally beneficial for Ohio. Earlier this year, the Health Policy Institute of Ohio released an analysis that found the Medicaid expansion would insure nearly half a million Ohioans and save the state about $1.8 billion in the next decade.

Instead of being concerned about fiscal problems, Owens concludes opponents of the Medicaid expansion simply dislike the president, Obamacare and Medicaid.

Michael Dittoe, spokesperson for Ohio House Republicans, pushes back at that notion. He points out the state budget will increase funding for Medicaid by $1 billion, allowing 231,000 more Ohioans to enter the system.

“When people say that we’re not doing anything for Medicaid, obviously that’s not true,” he says. “Certainly, we could have gone down the road of not funding that particular provision.”

The increased funding is going to people who are already eligible for Medicaid but, for whatever reason, aren’t currently enrolled. The federal government expects the new enrollees to sign up as a result of Obamacare raising awareness and education about health coverage.

In other words, the federal government already expects Ohio to pay for these Medicaid enrollees. Failing to do so would have likely violated the state’s Medicaid agreement with the federal government and, as Dittoe acknowledges when asked, resulted in penalties.

Although the Medicaid expansion is out of the state budget, there is a bill currently sitting in the House that would take up the expansion. Dittoe says that bill will likely be looked at in the early fall.

For legislators, that might be politically prudent: A poll released June 14 by the Health Foundation of Greater Cincinnati found 63 percent of Ohioans support the Medicaid expansion, with a margin of error of 3.3 percent. The University of Cincinnati's Institute for Policy Research conducted the poll for the Health Foundation between May 19 and June 2.

The $62 billion state budget for fiscal years 2014 and 2015 passed the Republican-controlled General Assembly on Thursday. It’s expected Kasich will sign it into law this weekend.

Check out all of CityBeat’s state budget coverage:
Report: State Budget Tax Plan Favors Wealthy
State Budget's Education Increases Fall Short of Past Funding
State Budget to Limit Access to Abortion

by German Lopez 03.05.2013
Posted In: News, Immigration, Budget, Economy, Privatization, Parking at 10:25 AM | Permalink | Comments (0)

Morning News and Stuff

Senators push immigrant policy, JobsOhio gets funding, parking plan passes committee

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.