Cincinnati's new budget proposals for the next two years are just now entering the public realm.The total budget that Cincinnati Mayor Aftab Pureval and City Manager Sheryl Long are presenting Friday morning is $1.59 billion.For basic city operations, it's $1.28 billion.For Capital needs, it's $302.9 million.Pureval's message about them is sobering."The central challenge for now and future fiscal years is to continue to deliver services that sustain, improve, and grow the city of Cincinnati, but with fewer resources," he wrote in a transmittal letter to members of city council.According to the mayor and city manager, operating expenses have continued to rise at a rate that far outpaces the growth of city revenue.The city projects revenue growth at 5.1% while spending to operate the city has gone up 6.9%.To stay on track, city leaders continued to search for new streams of revenue.They believe selling the city-owned railroad for $1.6 billion to Norfolk Southern would double the annual amount Cincinnati gets for infrastructure spending.City voters would have to approve and although the Mayor deferred to rail trustees as to the timing of a ballot issue, he laid a lot on the line today."What I will say is the sale of the railroad is incredibly important given the deficits on the general fund side, given the $400 million in deferred capital maintenance", Pureval told assembled media at City Hall. "Unless we can effectively diversify the incomes coming into the city, we are going to run out of money and run out of money quick for basic services like paving roads, repairing bridges, picking up trash, etcetera."The budget situation grows even more challenging because of the post-pandemic reality that's affecting offices and workplaces citywide.For fiscal year 2024, Pureval estimates Cincinnati could lose as much as $56 million in income tax revenue due to changes in where people work."Permanent work-from-home, remote work, and hybrid work arrangements are now common, meaning that fewer people work full-time from centralized office buildings," Pureval told lawmakers.City finances rely heavily on income tax as its primary revenue source.At City Hall in recent decades, there's never been much appetite for an earnings tax increase. Pureval told us today it has not been under discussion."To me, earnings tax and things like that, while they're not on the table at the moment, but we are really trying to be innovative and make sure that we're looking under every crack and crevice to see where opportunities lie."The mayor said many suburban residents who previously commuted into the city for work no longer do so.The new recommendations tread water for the city's safety services.There will be three police recruit classes over the next eighteen months as well as four fire recruit classes.Those are aimed at keeping up with projected attrition rates in the two services.They are not expected to increase the overall staffing levels in those departments.The city is staring at deferred maintenance projections of at least $400 million and possibly $500 million.What the mayor and manager propose to do about that will be of high-interest community-wide Friday.The recommended budget proposed "impactful investments" in five areas: Public safety and healthGrowing economic opportunityThriving neighborhoodsFiscal sustainabilityExcellent and equitable service deliveryCouncil hopes to vote on the budget recommendations and get a new city budget in place on June 14. Anyone from the public who wants to comment about the budget recommendations can do so in person at 5:30 p.m. on Monday, June 5.Members of an independent Futures Commission have been asked to examine the city's financial stability. Pureval wants their recommendations at the end of the year or early in 2024.
Cincinnati's new budget proposals for the next two years are just now entering the public realm.
The total budget that Cincinnati Mayor Aftab Pureval and City Manager Sheryl Long are presenting Friday morning is $1.59 billion.
For basic city operations, it's $1.28 billion.
For Capital needs, it's $302.9 million.
Pureval's message about them is sobering.
"The central challenge for now and future fiscal years is to continue to deliver services that sustain, improve, and grow the city of Cincinnati, but with fewer resources," he wrote in a transmittal letter to members of city council.
According to the mayor and city manager, operating expenses have continued to rise at a rate that far outpaces the growth of city revenue.
The city projects revenue growth at 5.1% while spending to operate the city has gone up 6.9%.
To stay on track, city leaders continued to search for new streams of revenue.
They believe selling the city-owned railroad for $1.6 billion to Norfolk Southern would double the annual amount Cincinnati gets for infrastructure spending.
City voters would have to approve and although the Mayor deferred to rail trustees as to the timing of a ballot issue, he laid a lot on the line today.
"What I will say is the sale of the railroad is incredibly important given the deficits on the general fund side, given the $400 million in deferred capital maintenance", Pureval told assembled media at City Hall. "Unless we can effectively diversify the incomes coming into the city, we are going to run out of money and run out of money quick for basic services like paving roads, repairing bridges, picking up trash, etcetera."
The budget situation grows even more challenging because of the post-pandemic reality that's affecting offices and workplaces citywide.
For fiscal year 2024, Pureval estimates Cincinnati could lose as much as $56 million in income tax revenue due to changes in where people work.
"Permanent work-from-home, remote work, and hybrid work arrangements are now common, meaning that fewer people work full-time from centralized office buildings," Pureval told lawmakers.
City finances rely heavily on income tax as its primary revenue source.
At City Hall in recent decades, there's never been much appetite for an earnings tax increase. Pureval told us today it has not been under discussion.
"To me, earnings tax and things like that, while they're not on the table at the moment, but we are really trying to be innovative and make sure that we're looking under every crack and crevice to see where opportunities lie."
The mayor said many suburban residents who previously commuted into the city for work no longer do so.
The new recommendations tread water for the city's safety services.
There will be three police recruit classes over the next eighteen months as well as four fire recruit classes.
Those are aimed at keeping up with projected attrition rates in the two services.
They are not expected to increase the overall staffing levels in those departments.
The city is staring at deferred maintenance projections of at least $400 million and possibly $500 million.
What the mayor and manager propose to do about that will be of high-interest community-wide Friday.
The recommended budget proposed "impactful investments" in five areas:
- Public safety and health
- Growing economic opportunity
- Thriving neighborhoods
- Fiscal sustainability
- Excellent and equitable service delivery
Council hopes to vote on the budget recommendations and get a new city budget in place on June 14. Anyone from the public who wants to comment about the budget recommendations can do so in person at 5:30 p.m. on Monday, June 5.
Members of an independent Futures Commission have been asked to examine the city's financial stability. Pureval wants their recommendations at the end of the year or early in 2024.
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