Reality Check? Projected Deficits Leave Little Stimulus Left For Support Programs
Cincinnati is getting more in federal stimulus than initially expected, but estimated budget deficits have also increased. The Budget and Finance Committee gave initial approval to spend more than $100 million at a contentious meeting Monday.
The city is expecting a total of about $311 million from the American Rescue Plan Act (ARPA) over the next two years. That's nearly $20 million more than initially projected, and includes two new restricted allotments:
- $9,923,076 for affordable housing
- $9,975,375 for health
The first payment of about $165 million is expected by May 11. The city manager's adjusted spending plan proposes using $91 million for projected deficits in the current and upcoming fiscal years, and another $21.7 million to re-fill restricted funds that lost revenue during the pandemic such as parking meters and the city's hotel tax.
The committee also gave initial approval to five ordinances from Mayor John Cranley for support programs using ARPA funds, totaling $17.5 million.
That leaves about $35 million for everything else this year.
"That doesn't even cover the $50 million that I want to go into the Affordable Housing Trust Fund that the city established in 2018," said Council Member Jan-Michele Lemon Kearney. "I mean, [there] is just no money left."
Initial Approval For Support Programs
The ordinances forwarded in committee Monday were all proposed by Mayor Cranley and had already been announced over the past few weeks.
- $2.5 million for ASCEND Cincy, a minority business accelerator
- $7 million for grants to performing and visual arts organizations, administered through ArtsWave
- $4 million for a second round of restaurant grants
- $2 million for the next phase of outdoor dining through 3CDC
- $2 million for grants to human services organizations
None of the allocations are final without approval from the full council; the first opportunity for that is Wednesday.
The first four measures did not get a roll-call vote; instead, they moved ahead in a process where a measure gets approval as long as there are no objections.
What About Next Year?
The city's second payment from ARPA of about $146 million is expected in May 2022. The city manager's proposal includes $66 million to fill the estimated deficit for fiscal year 2023
Interim Council Member Steve Goodin said the extent of the deficits are a reality check for council and the public.
"If we do not address the structural deficits going forward, if we don't do something on the remote working impact on our earnings tax, we're going to really regret it within the next year or so," Goodin said.
Some members say council needs to focus on the more immediate affects of the pandemic.
"When you have people who are hungry, who are homeless, who don't have jobs, who can't get childcare, we need to take care of them now," Kearney said. "This is a state of emergency."
Mann says he hopes to hammer out some final decisions at a meeting next Tuesday, with discussion and votes on the dozens of motions and ordinances proposed for spending the money.
Vice Chair Chris Seelbach continues to object to council moving so quickly. He points out the U.S. Treasury has still not released initial guidance on how the money can be spent.
See the city manager's updated proposal for ARPA spending below: