Friday, October 2, 2009

City's pension woes deepen

City's pension woes deepen | | The Cincinnati Enquirer

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The city went from $28 million to $38 million. The police department at one point was looking at laying off 128 officers. The uniformed officers were kept but behind the scenes non-sworns are being let go. Other city departments had to release workers as well. Now projections are $51 million deficit for 2010. The fire department will have to take a $7.6 million cut. Police and fire lay offs are almost a certainty for next year.

Balancing a public sector budget is never a pretty sight. Cincinnati has been hit with a lethal combination of increasing costs, decreasing tax revenues, and an aging workforce with hundreds of workers approaching retirement. By 2017, something like 49 percent of the city budget will go to paying retirements. The same phenomena caused a number of airlines to go out of business as more of their budgets had to be shifted from operations to annuities. As the the number of employees receiving annuities increased, less of the budget could be used for operations and maintenance of the fleet. Airfares could be increased only so far before competitors would drop their fares forcing the legacy carriers to also drop their fares.

The city is in a far more precarious position. It can't raise fares to meet the demand of more retirees. Increasing taxes can help only so much especially with so many citizens still looking for work. There will be less money available to hire new employees or purchase new equipment. The problems for the city doesn't stop with the budget. The fire department hasn't run an academy this year and there are no plans to run one next year. This means there isn't a new influx of firefighters to replenish the numbers of injured or retiring firefighters. Eventually the city will be forced into another drop program to retain firefighters beyond their retirement eligibility. The police are in a similar situations. There are around 200 police and 150 firefighters currently in the drop program that are eligible to leave in 2012. No new personnel, more personnel retiring and sever budget cuts paints a really grim future for public safety in Cincinnati.

The part that doesn't get discussed is the impact of a world class police and fire service to economic revitalization. Businesses are already disinclined to locating to Ohio due to our taxes. Compound that with a city that is perceived as "unsafe" due to fire and police that are stretched too thin adds another deterrent to new business choosing to locate in Cincinnati.

There are no easy answers to the above. The best solution seems to be approaching police and fire from a regional perspective. Sheriff Leis, who I disagree with on most things, has suggested one police department for Hamilton County. From a fiscal standpoint, this makes sense but local politics and biases will prevent this from happening. If we are truly interested in economic revitalization for the region, then we must focus on the safety and well being of the community. Maintaining a first class police/fire/EMS despite a depressed economic situation would show business owners that local leaders are invested in the well being of the community. A regional approach to police/fire/EMS is the only cost-effective way to do it.

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