The city is seeking a tax increase from 1.5 percent to 2.25 percent.
MIDDLETOWN, Ohio (AP) -- The lockout at AK Steel's Middletown Works, which entered its eighth month Sunday, isn't just a battle between a company and its union workers.
The effects of the lockout, which already has resulted in the loss of hundreds of jobs, are spreading across the community, home to steelmaking for more than a century.
Small businesses are feeling the hurt, and the city government faces cutbacks in police and firefighters.
Like other industrial towns across the Midwest that have been hurt by plant reductions or closings in recent years, Middletown has been struggling financially, and voters are being asked next month to approve an increase in the city income tax.
"Overall, revenue is down about 500,000 compared with the same time last year," City Manager Bill Becker said. "That's not all because of AK; we lost a major construction business last year. We've been losing revenue for several years."
Need for tax increase
Becker knows the tax increase -- from 1.5 percent to 2.25 percent -- will be a hard sell with people already feeling the ripple effect of the lockout.
It was necessary before the lockout, and even more vital now, he said.
"We've made cuts across the board," Becker said. "We don't pick up people's leaves anymore, and we haven't opened our swimming pools in two years. A lot of these decisions aren't popular, but they have kept the city solvent."
The city still has optimism for the future as it remakes its economy, but the AK standoff hangs over it. Hopes for a settlement rose when union workers took a vote on a company contract proposal about a week ago, but workers rejected it.
AK Steel locked out more than 2,500 hourly production and maintenance workers when their contract expired at midnight, Feb. 28. It has continued to run the mill with about 1,800 replacement workers and salaried personnel. Retirements and resignations have brought the number of union workers down to about 1,900.
The company says it needs a contract that wipes out a 40-a-ton competitive disadvantage it attributes to legacy costs. It has been adamant that it must eliminate work force guarantees, increase flexibility in assigning jobs, pass on some of its health-care insurance costs and convert its pension plan to a 401(k) type.
Then and now
Middletown, a city of about 53,000 people about 30 miles north of Cincinnati, once was undisputedly a company town, where the American Rolling Mill Co. -- later Armco and then AK Steel -- was founded in 1900 and generations of workers took coveted jobs right out of high school and spent their entire working lives in the mill.
Now AK is fighting to survive as a small player in an increasingly global steel industry, and its union work force gave up its independence in July to affiliate with the machinists.
Becker has seen AK's impact on the community since he became a police officer in the 1970s, when a larger corporate office and facilities that no longer exist had swelled the company to some 7,500 employees.
"Even now, you can't talk to anybody in Middletown that isn't impacted by the lockout," he said.
Most locked-out workers say they have pared back substantially on optional spending, such as eating out, and some small restaurants say their business is off by 50 percent or more. Unemployment benefits ended after six months.
Union members say some have lost cars, homes and even marriages because of the lockout's financial pressure.