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Cincinnati Likely To Have Budget Deficit In The Next Fiscal Year

City of Cincinnati

Cincinnati's city manager is predicting a nearly $14 million dollar budget deficit for the next fiscal year, which starts July 1st. 

Harry Black addressed the issue in a memoto Mayor John Cranley and city council members.

The city manager said the shortfall is due primarily to increases in public safety expenses and the repayment of the estate tax due to a previous collection error.  

The public safety increase is a result of:

  • Funding the FY2016 fire recruit class due to not receiving a federal SAFER grant
  • Additional fire overtime due to ending brownouts
  • Increasing emergency communications center staffing due to reducing the use of the 911 cell phone fees fund
  • Funding the police department's 107th recruit class of 30 recruits

The deficit could actually go higher because of expiring union contracts; and the tentative spending plan does not include any pay raises or cost of living adjustments.  Black said every one percent salary increase adds another $2.2 million to the budget.
There is also no additional money for streetcar operating expenses.  A report this week indicated that shortfall could range anywhere from $830,000 to $1.4 million.  The streetcar is scheduled to begin passenger service in September.

The implementation of body worn camera for the police department is also likely to contribute to the budget deficit.

“The projected deficit can be eliminated by either reducing expenditures or raising revenues,” Black wrote.  “Without raising revenues, the reduction to close the deficit equates to a four percent across the board reduction for all departments.  Exempting public safety departments from the reduction, the deficit is a ten percent across the board reduction for all other departments.”

Black said the administration is working to identify solutions for the deficit.

A city council committee gets its first look at the tentative budget on January 4th.  During that meeting the group will set the city's property tax rates, which the manager is not proposing to increase.  

The city’s estimated operating tax revenue is set at 5.6 mills for 2017, which is the same as 2016.  The millage rate for debt service is estimated at 6.5 mills for 2017 with no change from 2016.

Black must formally present his proposed budget in May, and he pledged the plan will be structurally balanced.  City council must adopt a spending plan by June 30th.
 

Jay Hanselman brings more than 10 years experience as a news anchor and reporter to 91.7 WVXU. He came to WVXU from WNKU, where he hosted the local broadcast of All Things Considered. Hanselman has been recognized for his reporting by the Kentucky AP Broadcasters Association, the Ohio Society of Professional Journalists, and the Ohio AP Broadcasters.