Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations
As a new strain of coronavirus (COVID-19) swept through the world in 2020, preparedness plans, masking policies and more public policy changed just as quickly. WVXU has covered the pandemic's impact on the Tri-State from the very beginning, when on March 3, 2020, Ohio Gov. Mike DeWine barred spectators from attending the Arnold Sports Festival in Columbus over concerns about the virus, even though Ohio had yet to confirm a single case of COVID-19.

Cincinnati Budget Released With No Layoffs Or Furloughs Despite Massive Deficit

city hall
Bill Rinehart

Cincinnati City Manager Patrick Duhaney has released his budget for the new fiscal year which starts July 1. The plan closes a $73.4 million general fund deficit without layoffs, furloughs or closing any city parks or recreation centers.
It does require borrowing $25 million to balance the budget. Plus, a number of vacant positions will not be filled, there will be no raises for non-represented employees, departments will have to reduce non-personnel spending, and the city will offer an early retirement program to further reduce its workforce.

The budget also recommends that streetcar passenger service remain halted for all the upcoming fiscal year. If approved, that means it would not carry passengers until at least July 1, 2021. The budget does include nearly $3 million for the privately contracted streetcar operator, Transdev, to maintain the cars, overhead wiring system and other parts of the system.

The proposed budget also maintains funding levels for human services agencies, neighborhood support and economic development programs. Some of that funding is being maintained with money the city received from the federal CARES Act related to the COVID-19 pandemic.

"Creating a balanced budget proposal is a daunting task even during normal times," Duhaney wrote in a message to Mayor John Cranley and city council members. "This year, this recommended budget was one of the most challenging tasks of my career, balancing significant reductions with the ability to weather the storm until the pandemic is over."

Before the coronavirus outbreak, the city's revenues were in the black and it could have had a surplus at the end of the fiscal year on June 30. That changed in March when businesses were shut down and residents were told to stay home as much as possible to prevent the spread of the virus.

For the new fiscal year, the city projects general fund revenues to be down by $44.8 million.

Some budget highlights: there's funding for the Citizen Complaint Authority to hire two additional investigators; there's $1 million for the Urban League to work with small businesses; and $1.5 million of parking meter revenue that would have gone to streetcar operations will now go to the general fund.

So how was the $73.4 million deficit closed?  

There were $32.6 million worth of spending reductions:

  • $8.5 million position eliminations and vacancies
  • $5.6 million transferred to money the city received from federal CARES Act
  • $4.2 million budget savings from departments
  • $4.2 million transferred to other funding sources
  • $3.5 million early retirement program
  • $2.2 million delaying police and fire recruit classes
  • $1.7 million miscellaneous non-personnel reductions
  • $1.2 million eliminating non-represented employees merit raises and COLAs
  • $900,000 healthcare savings
  • $400,000 reducing fire department overtime
  • $200,000 saving from clerk of council, council and mayor

There are $41.7 million one-time use funds:

  • $25 million of emergency borrowing which City Council approves in March
  • $15 million in CARES Act funding from the State of Ohio
  • $1.7 million transfer into general fund from capital projects

Mayor Cranley immediately forwarded the manager's proposed budget to City Council for consideration. Under the city charter, the mayor has 14 days to review it and make changes. That's not happening this year because of the compressed budget timeline. A spending plan must be approved by June 30.
Council's budget and finance committee will get a detailed budget presentation Monday.  

The public will be able to offer comments on June 16 and June 18 during hearing at the Duke Energy Convention Center. In person seating will be limited to 300 people, and the city will be offering people the chance to comment remotely using Zoom. You'll find instructions for how to participate here.

The $25 million of borrowed money could be scaled back or not used at all if the city receives additional money from the state and federal governments. If the economy recovers, and city revenues increase for the next fiscal year, it's possible the city could use money from its reserve accounts to pay off the loan earlier. 

Otherwise, the $25 million would be borrowed for a 10-year term. For the first year, the city would only pay interest, then the payment would be $3 to $3.2 million per year for the remaining years. The city would use money it receives from the Cincinnati Southern Railway that connect the city with Chattanooga. Cincinnati built the railroad in the late 1800s to improve the city's economy. Today it's leased to Norfolk Southern and the city receives more than $20 million in a year for the lease. That money is ordinarily used to fund infrastructure projects in the city.

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.