Wednesday, October 20, 1999
Shirey urges moratorium on spending
City's extra cash may not last
BY PHILLIP PINA
The Cincinnati Enquirer
While the city of Cincinnati will likely have $23 million extra at the end of this year, rising costs for health care, development and other projects may put the city in the red by the year 2003.
City Manager John Shirey is calling for a moratorium on nonemergency spending until next year's budget update is complete.
An update to his six-year projection of the general fund balance shows a $6.8 million deficit for the year 2003 and an $18.8 million shortfall for 2004. The update was released Tuesday.
“Council ought to make a commitment,” said Councilman Phil Heimlich, a critic of city spending. “A commitment to no longer open up the public treasury to everyone who walks into City Hall with their hand out.”
Too often, Mr. Heimlich said, council members are backing pet projects that are taking away resources to handle emergencies. He points to a January vote in which $14.5 million in new projects were funded by council.
The city has been relying on large carry-overs to make up budget shortfalls. In 1999, Cincinnati will spend about $2.8 million more than it will take in. But a $40 million carry-over from the year before will more than make up that difference, said Tim Riordan, the city's finance director. Future spending will eat up that carry-over by the year 2003.
In a report dated as recently as last month, Mr. Shirey was forecasting budget carry-overs throughout the six years, including $7 million in 2004. There are several reasons for the future deficits:
• Changes in the fire division manpower policy led to a $3 million increase in division spending in 1999.
• A rising number of uninsured patients helped by the city health department increased costs by $2.6 million.
• Increase in debt service for the Albert B. Sabin Convention Center expansion. Mr. Shirey recommended about $40 million in bonds for the project; city council approved $50.8 million.
• A rollback freezing property tax revenue for the year 2000 at the 1999 level. The vote saved taxpayers about $3.2 million.
The timing of Mr. Shirey's report, about two weeks after the rollback vote, irked Councilman Paul Booth. He voted against the rollback this summer but voted for it Oct. 6, while under the impression the city was in the black.
“It certainly would have been helpful to have had this report several weeks ago,” Mr. Booth said.
Mr. Heimlich, who backed the rollback, said it was simply a measure that prevented a tax increase.
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