Local governments confront uncertain economic futures

With the NATIONAL recovery from the economic recession anemic, at best, and with the state of Ohio keeping a tight rein on its budget, local governments must resist the urge to go on spending sprees.

The future is uncertain, at best, as most private sector employers recognize. The disturbingly high unemployment rate attests to the fact that jobs aren’t being created at a fast enough pace to meet the definition of a robust economy.

Given that reality, governments at all levels should disabuse themselves of the notion that revenues will increase next year. There is nothing to suggest that public treasuries are going to be flush.

Therefore, officeholders must keep a tight lid on spending.

Indeed, the recent budget hearings by commissioners in Mahoning and Trumbull counties make clear that revenues in 2014 will be virtually the same as this year.

In Mahoning County, it means a general fund of about $50.2 million, compared with the $50.3 million appropriated for 2013. In Trumbull County, the operating budget will be between $43 million and $44 million, compared with $43.4 million this year.

With revenues being flat, the commissioners will have to establish spending priorities, which means most departments will not receive the budget increases officeholders have requested.

It also means that granting pay raises in the midst of a struggling national economy would be the height of irresponsible governance.

The argument being put forth by some elected officials that their employees have had their wages frozen for the last couple of years does not resonate with private-sector taxpayers.

The reality of the non-government workplace is that wages have been stagnant for several years, defined pensions have been frozen or are no longer offered, and payrolls are being cut through attrition.

The national economic recession that began in late 2008 did more damage to the private sector than the public sector.

So, when the county commissioners or other keepers of the public purses review funding requests in deciding how to spend taxpayer dollars, we would suggest this simple rule of thumb: no pay raises — at least for the next couple of years.

The uncertainty surrounding the national economy calls for a conservative approach to government spending.

Proposed tax increase

In Mahoning County, the commissioners are proposing a one-quarter percent sales-tax increase and also are seeking the renewal of a half-percent tax. The two tax issues, either separately or together, will be placed before the voters in May 2014, which means the case for additional money and maintaining the current revenue stream will have to be made in the next four months.

Commissioners Anthony Traficanti, Carol Rimedio-Righetti and David Ditzler must know that any pay raises next year will result in a backlash from the taxpayers.

They should warn officeholders, who under the law set their own spending priorities for the money allocated by the commissioners, that whatever they do will reflect on county government in general.

In Trumbull County, an arbiter will have the final say on whether 80 sheriff’s employees will get pay raises in 2014, but given the reality of the budget, a decision will have to be made as to how the additional cost will be absorbed. If the sheriff’s department gets more money than it did this year, another department will get less.

Indeed, commissioners already are bracing for a 12 percent increase in health care costs — from $11.2 million this year to $12.5 million in 2014.

A major concession has been made by commissioners Paul Heltzel, Dan Polivka and Frank Fuda. The employees are being asked to pay for only half the $1 million increase. The other half will be covered by the county (read that the taxpayers.)

Incidentally, despite the fact that most county employees have had their wages frozen for the past several years, they still have received step increases.

Here’s the bottom line: State government has no intention of making up for the cuts to the Local Government Fund, which is used by counties, cities, townships and villages; it is foolhardy for any elected official to expect a major increase in sales-tax revenues; and, believing that voters will summarily approve a tax increase in the midst of recession requires a leap of faith that is an iffy proposition at best.

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