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by German Lopez 07.01.2013
Posted In: News, Budget, Health care, Education at 09:21 AM | Permalink | Comments (0)

Morning News and Stuff

Governor signs budget, school funding falls short in long term, Medicaid expansion denied

Following approval from the Republican-controlled General Assembly earlier in the week, Gov. John Kasich last night signed a $62 billion two-year state budget that makes sweeping changes to taxes and takes numerous anti-abortion measures. On the tax front, Policy Matters Ohio previously criticized the mix of income tax cuts and property and sales tax hikes for favoring the wealthy. Meanwhile, abortion-rights advocates say the budget will hurt women by limiting access to abortion, while Republicans say they’re trying to protect the “sanctity of human life.”

The budget also makes changes to the school funding formula that increases funding to schools by $700 million, but the funding is still $515 million less than Ohio schools got in 2009. Stephen Dyer, former Democratic state representative and education policy fellow at left-leaning think tank Innovation Ohio, says Republican legislators should have spent less time on tax reform and more on education. Although Dyer acknowledges the final education plan is more equitable than Kasich’s original proposal, he argues equity doesn’t matter much when schools are still underfunded.

One policy that didn’t make it into the final state budget: the Medicaid expansion. Kasich strongly backed the expansion throughout the budget process, but Republican concerns about federal funding ultimately won out and kept the Medicaid expansion from the final version of the budget. Col Owens, co-convener of the Southwest Ohio Medicaid Expansion Coalition, says the expansion’s absence is irresponsible, but he’s optimistic it will be passed in a stand-alone bill later on. Owens and other supporters of the expansion argue it will help insure hundreds of thousands of Ohioans and save the state money by placing more of the funding burden on the federal government.

One beneficiary of the state budget: low-rated charter schools.

Democratic State Sen. Nina Turner today announced her candidacy for Ohio secretary of state — a position she will attempt to take from Republican Jon Husted. Turner is a vocal critic of Republicans’ voting policies, which she says suppress voters, particularly minorities and low-income Ohioans.

Ohio Attorney General Mike DeWine on Friday released the first Human Trafficking Statistics Report, which his office plans to release on an annual basis to continue spotlighting Ohio’s trafficking problem. Law enforcement identified 38 human trafficking victims in the last year, but that’s only a fraction of the estimated thousands of Ohioans, particularly youth and those “at risk,” who are reportedly trafficked and abused each year.

The Cincinnati Park Board won the National/Facility Park Design Award for Smale Riverfront Park. The award from the National Recreation and Park Association recognizes the park’s design, the inclusiveness of the design process and how the board met the local community’s needs for the park. This is just another major national award for The Banks; earlier in the year, the project won the American Planning Association’s 2013 National Planning Excellence Award for Implementation.

Some Republicans are not taking last week’s U.S. Supreme Court decision on same-sex marriage well: State Rep. John Becker, a Republican from Clermont County, now says polygamy is inevitable.

Cincinnati is currently looking for a new police chief, and it already has 13 applications.

Ohio gas prices are down again this week.

Kasich says he’s not interested in running for president in 2016.

Apparently, the unmanned Voyager 1 spacecraft entered a scientifically funky region last summer.

Here is an explanation of what happens when stars collide.

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 06.28.2013
Posted In: News, Education, Budget at 01:40 PM | Permalink | Comments (0)
cps offices

State Budget's Education Increases Fall Short of Past Funding

Cincinnati Public Schools getting $15 million less than it did in 2009

Compared to the previous budget, the two-year state budget passed by the Republican-controlled General Assembly Thursday increased school funding by $700 million. But the funding is still $515 million less than Ohio schools received in 2009.

The result: Cincinnati Public Schools will receive $15 million less in state funding than it did in 2009, joining three in four school districts who have a net loss to funding between 2009 and 2015.

Still, Republicans are calling the funding boost the largest increase to education spending in more than 10 years.

“No school district in the state of Ohio will receive less funding than current levels,” says Michael Dittoe, spokesperson for Ohio House Republicans. “Eighty percent of Ohio’s students … are in one of the school districts that is receiving an increase.”

Stephen Dyer, former Democratic state representative and education policy fellow at left-leaning think tank Innovation Ohio, says the claim is dishonest because it ignores longer-term trends in funding.

“It’s like they cut off both of your legs, give you back one of them and say, 'You should thank us,'” he says.

Republicans defend the cuts by citing an $8 billion deficit in 2011, which had to be eliminated under state law. Some of the cuts from that previous budget directly impacted school funding, but the decreases also eliminated subsidies that previously benefited schools, such as tangible personal property reimbursements.

Dyer says the state budget situation has changed since then. Instead of focusing on tax cuts, he argues state legislators should have prioritized education funding.

Another problem, according to Dyer, is how the increased funding is distributed. Although Dyer acknowledges the plan is more equitable than the governor’s original proposal, he says some of the most impoverished schools districts, particularly the poor and rural, will get the smallest increases.

Even if there was full equity, Dyer claims there’s not enough money going into education as a result of years of cuts. To illustrate his point, he gives an example: “If I’m going to go see Superman with three of my friends and it costs $10 each to get in, I’ve got $36 and I give everybody $9, none of us are getting in. Even though I perfectly distributed the money equally, … the fact is none of us are getting in.”

The budget’s tax changes could also impact future local funding to schools. As part of the changes, the state will not subsidize 12.5 percent of future property tax levies — something the state does for current levies. For local taxpayers, that means new school levies will be 12.5 percent more expensive.

That, Dyer argues, will make it more difficult to pass future school levies, and that could force schools to ask for less money if they want levies to get voter approval.

“The legislature and legislators are doing a real disservice to people to tell everybody that they’re getting an increase and no one is getting cut,” Dyer says. “They need to be honest with people.”

The budget also increases funding to “school choice” options, including the addition of 2,000 vouchers for private schooling that will be available to kindergarten students in households making less than 200 percent of the federal poverty level.

Republicans argue the vouchers give lower-income children access to schools and options in education that would otherwise be unavailable to them.

But a January report from Policy Matters Ohio found the extra mobility enabled by school choice options hurts student performance and strains teachers and staff by forcing them to more often accommodate new students.

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 this weekend.

Check out all of CityBeat’s state budget coverage:
Report: State Budget Tax Plan Favors Wealthy
State Budget Rejects Medicaid Expansion
State Budget to Limit Access to Abortion
by German Lopez 06.28.2013
Posted In: News, Abortion, Budget, 2013 Election at 09:26 AM | Permalink | Comments (0)
ohio statehouse

Morning News and Stuff

State tax plan favors wealthy, state budget limits abortion, mayoral primary incoming

The Republican-controlled Ohio General Assembly yesterday passed its state budget for the next two years, and Gov. John Kasich is expected to sign the bill this weekend. Part of the budget is a tax plan that would cut income taxes but raise sales and property taxes in a way that Policy Matters Ohio, a left-leaning public policy think tank, says would ultimately favor the state’s wealthiest. On average, individuals in the top 1 percent would see their taxes fall by $6,083, or 0.7 percent, under the plan, while those in the bottom 20 percent would pay about $12, or 0.1 percent, more in taxes, according to Policy Matters’ analysis.

The state budget also includes several anti-abortion measures: less funding for Planned Parenthood, more funding for anti-abortion crisis pregnancy centers, regulations that could be used by the state health director to shut down abortion clinics and a requirement for doctors to do an external ultrasound on a woman seeking an abortion and inform her whether a heartbeat is detected. Republicans claim they’re protecting the sanctity of human life, while abortion rights advocates are labeling the measures an attack on women’s rights.

Cincinnati will have a mayoral primary on Sept. 10. Five candidates vying for the highest elected position in the city: Democrats Roxanne Qualls and John Cranley, Libertarian Jim Berns, self-identified Republican Stacy Smith and Sandra Queen Noble. Qualls and Cranley are widely seen as the favorites, with each candidate splitting on issues like the parking lease and streetcar. Qualls supports the policies, while Cranley opposes both. A recent poll from the Cranley campaign found the race deadlocked, with Cranley and Qualls both getting 40 percent of the vote and the rest of polled voters claiming they’re undecided.

Former U.S. Rep. Gabrielle Giffords will appear at the Northside Fourth of July parade. Giffords will be in Cincinnati as part of a nationwide tour on gun violence.

Elmwood Place’s speed cameras are being confiscated by the Hamilton County Sheriff Department. Judge Robert Ruehlman originally told operating company Optotraffic to turn the cameras off, but when the company didn’t listen, the judge ruled the cameras should be confiscated.

The Ohio-Kentucky-Indiana Regional Council of Governments released its new bike map for southwest Ohio.

President Barack Obama signaled on Thursday that the federal government will extend marriage benefits to gay and lesbian couples in all states, even those states that don’t allow same-sex marriage. That may mean a gay couple in Ohio could get married in New York and Massachusetts and still have their marriage counted at the federal level, but state limitations would still remain. The administration’s plans follow a U.S. Supreme Court ruling on Wednesday that struck down a federal ban on same-sex marriage.

The U.S. Senate on Thursday approved a bill to overhaul the nation’s immigration laws. Ohio’s two senators were split on the bill: Democratic Sen. Sherrod Brown voted for it, while Republican Sen. Rob Portman voted against it. A Congressional Budget Office report previously found the bill would reduce the nation’s deficit and boost the economy over the next decade.

Scientists cloned a mouse with a mere blood sample.

CityBeat won a bunch of awards at Wednesday’s Society of Professional Journalists Cincinnati chapter awards banquet and hall of fame induction ceremony. Read about them here.

by German Lopez 06.27.2013
Posted In: News, Abortion, Budget at 03:51 PM | Permalink | Comments (0)
chastity bunch

State Budget to Limit Access to Abortion

Republican legislators claim they’re protecting “sanctity of human life”

Republican state legislators are using the two-year state budget to pass sweeping anti-abortion measures — and they’re proud to admit it.

The goal is “to maintain the sanctity of human life,” says Michael Dittoe, spokesperson for Ohio House Republicans.

Most recently, the House-Senate conference committee, which put the final touches to the state budget, tacked on an amendment that requires doctors to perform an external ultrasound on a woman seeking an abortion and inform the woman if a heartbeat is detected. The doctor would also be required to explain the statistical probability of the woman carrying the fetus to birth.

The amendment came in addition to other anti-abortion measures in the budget that would reprioritize family services funding to effectively defund Planned Parenthood, increase funding for anti-abortion crisis pregnancy centers and impose regulations that the state health director could use to shut down abortion clinics.

Under the regulations, abortion clinics would be unable to set patient transfer agreements with public hospitals, and established agreements could be revoked by the state health director. At the same time, if a clinic doesn’t have a transfer agreement in place, the state health director could shut it down with no further cause.

The rules allow abortion clinics to set agreements with private hospitals, but abortion rights advocates argue that’s more difficult because private hospitals tend to be religious.

Abortion rights advocates are protesting the measures, labeling them an attack on women’s rights.

“If the governor and members of the Ohio General Assembly want to practice medicine, they should go to medical school,” said Kellie Copeland, executive director of NARAL Pro-Choice Ohio, in a statement. “We urge Gov. (John) Kasich to veto these dangerous provisions from the budget. Party politics has no place in a woman’s private health care decision. The time is now to stand up and lead, not in the interests of his party, but in the interests of the women and families he has been elected to lead.”

Dittoe insists Republicans are not attacking women with the measures: “The women in our caucus have introduced some of these proposals. It’s hard to say it’s a ‘war on women’ when you have women actually introducing the legislation. It’s certainly not about an attack on women; it’s about protecting human life.”

Abortion rights supporters rallied today in Columbus in a last-minute stand, calling on Kasich to line-item veto the measures — a move that would keep the rest of the budget in place but nullify the anti-abortion provisions.

Kasich has so far declined to clarify whether he will veto the anti-abortion measures, instead punting multiple reporters’ questions on the issue.

Much of the debate has focused on Planned Parenthood, which provides abortion services, sexually transmitted infection and cancer screening, pregnancy tests, birth control and various other health care services for men and women.

Supporters point out no public funds go to abortion services, which are entirely funded through private donations. Public funds are instead spent on Planned Parenthood’s other services.

Dittoe says that Republicans still take issue with the abortion services, and it’s the sole reason Planned Parenthood is losing funding.

“Members of the House who have issues with Planned Parenthood have only issues with the abortion services,” he says. “The rest of what Planned Parenthood provides, I imagine they have no issue with whatsoever.”

About 15 percent of Planned Parenthood of Greater Ohio’s budget comes from the family planning grants that are being reworked. Not all of that money is allocated by the state government; a bulk is also set by the federal government.

The anti-abortion changes will go into effect with the $62 billion state budget for fiscal years 2014 and 2015. Both chambers of the Republican-controlled General Assembly passed the budget today, and Kasich is expected to sign the bill 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 Rejects Medicaid Expansion

by German Lopez 06.27.2013
Posted In: News, Budget, Taxes at 12:14 PM | Permalink | Comments (0)

Report: State Budget Tax Plan Favors Wealthy

Top 1 percent to get $6,083 tax cut

An analysis released June 26 found Ohio’s top 1 percent would get the biggest breaks from the tax plan included in the final version of the two-year state budget, while the state’s poorest would pay more under the plan.

The analysis, conducted by the Institute on Taxation and Economic Policy for public policy think tank Policy Matters Ohio, shows the tax plan’s slew of tax cuts and hikes balance out to disproportionately favor the wealthy in terms of dollars and percents.

On average, the top 1 percent would see their taxes fall by $6,083, or 0.7 percent, under the plan. The next 4 percent would pay $983, or 0.5 percent, less in taxes.

Meanwhile, the bottom 20 percent would pay about $12, or 0.1 percent, more in taxes. The second-lowest 20 percent would see their taxes go down by $5, rounded to 0 percent. The middle 20 percent would see a tax cut of $9, which is also rounded to 0 percent.

Policy Matters criticizes the tax plan, claiming the revenue should go to other programs, not tax cuts.

“Rather than approving a tax plan that will further shift Ohio’s tax load from the most affluent to low- and middle-income residents, we should direct those dollars into needed public services,” said Zach Schiller, Policy Matters Ohio research director, in a statement. “That includes restoring support for local governments and schools, and bolstering human services, from foodbanks to child care.”

Michael Dittoe, spokesperson for Ohio House Republicans, says the tax plan is supposed to provide an economic boost to almost everyone, not any specific group.

“The tax plan is going to provide an overall tax cut for nearly all Ohioans,” he says. “What this plan intends to do is not disproportionately favor the wealthy at all.”

The broad tax cuts, Republicans claim, should provide a boost to Ohio’s economy that will spur further job growth.

But Schiller argues the tax cut ultimately won’t create jobs: “A 21-percent cut that was approved in 2005 has not kept Ohio’s job market from underperforming that of the country as a whole during and after the last recession.”

The tax plan cuts income taxes for all Ohioans and particularly business owners, but it balances the cuts by hiking sales and property taxes.

Specifically, the budget cuts income taxes for all Ohioans by 10 percent over three years, gives business owners a 50-percent tax break on up to $250,000 of annual net income and creates a small earned income tax credit for low- and middle-income working Ohioans based on the federal credit.

To balance the cuts, the plan raises the sales tax from 5.5 percent to 5.75 percent, increases future property taxes by 12.5 percent and graduates the homestead tax exemption to be based on need, meaning the lowest-income seniors, disabled and widowed Ohioans will get the most out of the exemption in the future.

Most recently, the conference committee added two safeguards for low-income Ohioans: a credit that wipes out income-tax liability for Ohioans making $10,000 or less a year and another $20 credit for those making $30,000 or less a year.

The Policy Matters analysis doesn’t take into account the two changes to property taxes and several other, smaller changes to income and sales taxes, but the rest of the changes, including the conference committee’s recent adjustments, are considered.

The tax plan is part of the $62 billion state budget for fiscal years 2014 and 2015, which passed the Republican-controlled General Assembly today. It's expected Republican Gov. John Kasich will sign it into law this weekend.

Update: Budget bill passed by General Assembly.

Check out all of CityBeat’s state budget coverage:
State Budget's Education Increases Fall Short of Past Funding
State Budget Rejects Medicaid Expansion
State Budget to Limit Access to Abortion

by German Lopez 06.24.2013
Posted In: News, Budget, Streetcar at 01:51 PM | Permalink | Comments (2)

Streetcar Project to Move Forward

Council measures increase capital funding, require more transparency

The streetcar project remains on track following today's votes by City Council's Budget and Finance Committee, which approved increased capital funding and accountability measures that aim to keep the public informed on the project's progress.

The increased funding was previously proposed by City Manager Milton Dohoney to fix a $17.4 million budget gap. The money will come from more issued debt and pulled funding from various capital projects, including infrastructure improvements around the Horseshoe Casino. Under state law, none of the capital funding could be used for operating budget expenses, such as police and fire.

The accountability measures also require the city administration to report to City Council on the streetcar's progress with a timeline of key milestones, performance measures, an operating plan, staffing assessments and monthly progress reports.

"The progress reports should be easy-to-understand and made available online to ensure transparency and accountability to City Council and to citizens," the motion reads.

Council members Roxanne Qualls, Laure Quinlivan, Chris Seelbach, Yvette Simpson and Wendell Young voted for the measures. Council members P.G. Sittenfeld, Chris Smitherman and Charlie Winburn voted against both. Councilwoman Pam Thomas voted against the funding ordinance, but she abstained from voting on the motion imposing accountability measures.

Qualls, who revealed the accountability measures in a press conference prior to today's committee meeting, said the measures will move the streetcar forward and help keep the public informed.

"I will vote today to continue the streetcar project because we need to continue moving Cincinnati forward," she said. "At the same time, while I remain a supporter, it is with the recognition that it is time for a reboot on the project to instill public confidence in its management."

Smitherman did not seem convinced.

"I believe the administration will be back asking for more money on the streetcar," he claimed, pointing to pending litigation with Duke Energy over who is legally obligated to pay for moving utility lines to accommodate the project.

Smitherman and Sittenfeld also criticized their colleagues for not bringing the accountability measures to a vote earlier in the process.

"You would think seven years ago there would have been a motion like this in front of us," Smitherman said, referencing when City Council first approved the streetcar project.

Among the accountability motion's items is an operating plan, which streetcar critics have long demanded.

The city administration estimates operating the streetcar will cost about $3.5 million a year, indicating in the past that casino tax revenue would be used to pay for the costs.

Supporters say those costs will be outweighed by the city's estimated three-to-one return on investment for the streetcar project — an estimate backed by studies from advising company HDR and the University of Cincinnati.

Simpson in particular argued the costs will be made up through increased revenue as the streetcar brings in more businesses and residents to Cincinnati.

Still, Simpson says those estimates don't matter to streetcar opponents.

"If it was $5, there would be individuals who don't support this project," she said.

Winburn responded by saying he supports the streetcar as a concept, which roused laughter from streetcar supporters in the audience. Throughout the project's many hearings, opponents of the streetcar have often said they support streetcars as a concept — at least until they have to put their support to a vote or commit funding.

Still, Winburn added, "Even if you all are wrong, I want to commend you for fighting for what you believe in."

The streetcar project's $17.4 million budget gap is a result of construction bids coming in $26 million to $43 million over budget — a result of "errors in bid documents," according to Qualls.

Besides increasing funding, the city is also hiring John Deatrick, project manager of The Banks, to head the streetcar project. Multiple city officials, including Qualls and Quinlivan, have praised Deatrick for his ability to bring down project costs and put large projects on track.

The funding currently set for the streetcar will only go to the first phase of the project. The final plan calls for tracks stretching from The Banks to the Cincinnati Zoo.

"If the intent of the streetcar would only be to go from The Banks to just north of Findlay Market, then I never would have said it's a project worth doing," Dohoney previously told City Council. "The intention has always been to connect the two major employment centers of the city and go beyond that."

But Smitherman says talk of another phase is financially irresponsible: "I want to indicate to the public that they (the city administration) don't have a budget for the second leg."

The funding ordinance and accountability motion must now be approved by a full session of City Council, which has the same voting make-up as the Budget and Finance Committee.

If it's approved, the federal government has committed another $5 million to the streetcar that will help restore certain aspects of the project previously cut because of budget concerns.

by German Lopez 06.23.2013
Posted In: News, Economy, Budget at 07:13 PM | Permalink | Comments (0)

Report: Government "Megadeals" Fail to Produce Jobs

Ohio ranks No. 3 for massive subsidy deals with corporations

Ohio is No. 3 in the nation for “megadeals” — massive government subsidies to corporations that are meant to encourage in-state job creation — but a new report found many of the deals rarely produce the kind of jobs initially touted by public officials.

In the Good Jobs First report released on June 19, Ohio tied with Texas as No. 3 for megadeals, which Good Jobs First defines as subsidies worth $75 million or more. Michigan topped the list with 29 deals, followed by New York with 23.

In the Cincinnati area, local and state agencies agreed to pay $196.4 million to Convergys in 2003 and $121 million to General Electric in 2009 to keep and create jobs in the area.

It’s no secret the deal with Convergys went sour for Cincinnati. In December 2011, the company, which provides outsourced call center services, agreed to pay a $14 million reimbursement to the city because the company’s downtown employment fell below 1,450 — the number of jobs required under the initial deal. The reimbursement deal also calls for the company to pay an additional $5 million if its downtown employment falls below 500 before 2020.

The Good Jobs First report finds this kind of failure is not exclusive to the Convergys megadeal or Cincinnati; instead, the report argues that megadeals are expensive and often fail to live up to expectations.

“Despite their high costs, some of the deals involve little if any new job creation,” said Good Jobs First executive director Greg LeRoy in a statement. “Some are instances of job blackmail, in which a company threatens to move and gets paid to stay put. Others involve interstate job piracy, in which a company gets subsidies to move existing jobs across a state border, sometimes within the same metropolitan area.”

For the jobs that are kept and created, states and cities end up paying $456,000 on average, with the cheapest deals costing less than $25,000 per job and the most expensive costing more than $7 million per job.

The report finds the number of megadeals per year has doubled since 2008, on top of getting more expensive in the past three decades. Each megadeal averaged at about $157 million in the 1980s, eventually rising to $325 million in the 2000s. The average cost dropped to $260 million in the 2010s, reflecting the price of deals made in the aftermath of the Great Recession, which strapped city and state budgets.

“These subsidy awards are getting out of control,” said Philip Mattera, research director of Good Jobs First and principal author of the report, in a statement. “Huge packages that used to be reserved for ‘trophy’ projects creating large numbers of jobs are now being given away more routinely.”

Ultimately, the report aims to increase transparency for such subsidies, reflecting an ongoing goal for Good Jobs First. To do this, the organization has set up a database (www.subsidytracker.org) that anyone can visit to track past, present and future subsidy deals.

But the report claims much of this work should already be done by the Governmental Accounting Standards Board (GASB), which “has been long-negligent in failing to promulgate regulations for how state and local governments should account for tax-based economic development expenditures,” according to a policy sidebar from LeRoy. “If GASB were to finally promulgate such regulations — covering both programs and deals — taxpayers would have standardized, comparable statistics about megadeals and could better weigh their costs and benefits.”

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 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.