Back To The Lab...

...without a mic to grab.

Time flies when you are trying to reorient yourself to a brand new locale. We decided to take advantage of the opportunities that arise during a crisis ( low interest rates and housing prices) and made a break for the greener pastures of Medina.

The long hiatus was harder to break than I expected. Maybe being out of the Akron city limits slowed the perception of time or maybe not. Medina is a lot like Akron but without the mercenary police force and Circle K's. They also have one of them giant gazebos in the town square which takes some getting used to.

It's two and a half months and an off year election since my last transgression, uh post, but, I think now is as good a time as any to wade back into the surly waters. I hear there's a Senate and gubernatorial race around the corner.

Robart Drinks The Tea

The local chapter of the tea baggers were rockin' on the river in Cuyahoga Falls Wednesday. According to reports the place was packed with local patriots clamoring to get their freedoms back. The event featured remarkable speeches by pols including the king of sneer, Tim Grendell. He seems to be at all of these events.

Even Falls Mayor Don Robart got in on the celebratory berating of all things federal:

Robart said that former President George W. Bush's bailout ''has been a total failure'' and that President Barack Obama's stimulus bill ''has been worse.''

Uhh, yeah Don that stimulus bill thing has been so bad that your administration has opted in for millions of federal dollars. Someone should vet the mayor's speeches before he says something rash. While Don was busy riling up the crowd at the tea party his minions back at city hall were busy racking up ARRA funding.

To date the City of CF has applied for $138,527,132 in federal stimulus dollars. You can't make this crap up. Included in that amount is $50 million on behalf of the school district to build a new learning campus.

Robart has decided to water the trees of Cuyahoga Falls with the nickels and dimes of us tax paying patriots. Shhh, don't tell the gun toting loons at the rally you are actually big on spending federal dollars on roads, bridges and shopping center demolitions.

The request submissions are available at the State of Ohio's Recovery website.

Keno As Proxy

The results are in on Ohio's Keno gambit and the numbers are pretty weak. According to the State Lottery Commission the expansion of games of chance as a revenue source fell short, really short.

The venture that was used to beef up revenue to the State by an estimated $73 million performed well below expectation. The annual take for keno in Ohio, $30 million, not so hot.

Officials blame the shortfall on hard economic times. I blame it on the over-rated nature of gambling schemes to solve State revenue woes. The money raised by keno is earmarked for education funding but thankfully money is fungible. The State won't have to cut funding to education due to the shortfall.

The pressing issue now becomes the massive gamble the State budget has placed on video terminal slots and whether they will perform as advertised. The working number for the foray into gambling is expected to back fill revenue to the tune of $930 million. That's nearly a billion dollars in programs that were spared from the chopping block during the FY2010 budget process.

If the VLTs perform as poorly as keno the Gov' could be forced to cut another $500 million from the freshly approved State budget. Any subsequent cuts made will most certainly hit bone.

The Fringe Benefits

A Democrat is president and that means the fringe elements of the hard right wing are busy at establishing a foothold in the American body politic.

The debate around health care reform has certainly highlighted what's in store for the next several years. If it's not the rampant use of the Hitler comparisons it's the unitelligible dribble permeating the mob scenes at town hall meetings that defines this latest resurgence of reactionary mouth breathers.

This persistence of lunatic fringe in public discourse will have consequences. As the SLPC has reported, we've seen this kind of social movement before and it's back in vogue,

Almost a decade after largely disappearing from public view, right-wing militias, ideologically driven tax defiers and sovereign citizens are appearing in large numbers around the country. “Paper terrorism” — the use of property liens and citizens’ “courts” to harass enemies — is on the rise. And once-popular militia conspiracy theories are making the rounds again, this time accompanied by nativist theories about secret Mexican plans to “reconquer” the American Southwest.

Surely not all of the screamers at health care forums are of the militant ilk. Some of them are just uninformed or unwilling to listen to the facts of the matter. You'll have that anywhere. The problem is that the influence of the re-surging militia or Bircher movement will bleed into the everyday right wing cadre of citizenry. What was once very fringe will become more prevalent.

I'm afraid that all of the very important debates to be had in the next few years, like health care or climate change, are going to transpire in the midst of these proto-brownshirts that have descended on the public square like a modern day lynch mob. I'm sure it has nothing to do with the election of a black man as president.

Authoritarians Against Authority

The Beacon Journal is doing its best to keep Slurred-Speechgate in the news. The latest reminder is a front pager that attempts to stir up controversy about reports filed by police officers that responded to the scene of last weekend's Mayoral incident (I think a crime actually occurred there too). The question begging to be asked is whether a request was made to change the official account of what happened last weekend.

The Mayor's slurred speech is now front and center.

One of the officers had complained to the FOP boss that he was asked to white-wash the aspects of the report that mention the Plusquellic's slurred speech and nasty demeanor. There has to be more pertinent questions asked about the latest dust up between the FOP and the Mayor. That's really what this about isn't it?

Yeah Yeah, we know Plusquellic is brash and even heavy handed. The mayor's prerogative is to make it clear he's the guy running the guy running (micromanaging) the show in Akron.

As I've pointed out I think most effective mayors do have these traits. Sure it rankles the members of the public safety forces when the guy they are directed to show disdain for bosses them around. I'm sure the rank and file have been given their marching orders - the mayor is not to be trusted. An age old fight continues.

What rankles me, a taxpayer, is the blatant disregard by police officers for the just order of things in city governance. The Beacon article made sure to point out that the officer who made the claim has an honorable military record with the U.S Marines. While that is impressive and much appreciated it's not an excuse to contravene the mandate our elected leaders have to act as the chief executive of the city. Even though it may hurt your feelings.

How can I say this politely? The union president is not the elected leader of Akron, the mayor is. As an police officer you don't have to like him but, you do have to respect his position. He put in office by a vote of the people (twice in less than two years). In fact I'm almost sure that the armed forces are tasked with protecting our system which is based on the rule of law.

To go further I'd guess that one of the tenets that people who've served in the armed forces take with them is respect for the chain of command. The stubborn fact here is that the dude at the top of the food chain is the mayor and you don't have to like him to serve and protect the rest of us. The FOP leadership should consider this principle, especially if they are going to foist that Safety Tax Levy on us this fall.

Wrongsizing State Tax Revenue

The State's budget impasse may be near a conclusion but the real issues with the long term budget structure are not going away.

I've been barking about the massive failure of the tax reforms enacted in 2005 and 2007 for some time now. Those changes instituted under the guise of reform may have been politically expedient buy have contributed to the historic crash in State tax receipts.

The latest confirmation comes from an official analysis conducted by Office of Budget & Management. Careful examination reveals just how badly the reforms have buried Ohio government in a sea of red ink. Consider the findings released in this weeks GONGWER NEws Service (s/r) report for July 9th:

Agency spokesman John Kohlstrand said the annual drop is by far the largest in years for which the state has easily researched data, as he personally looked up numbers dating back more than 50 years.

"Nothing remotely like this has happened in the past half century," he said. "Certainly, it is a historic drop."

While not a surprise to officials given the dismal performance of the personal income tax and other revenue sources in the later months of FY 2009, the final year-to-date numbers were dragged deeper into the red by a month that saw Ohio's coffers take in nearly 24% less in tax collections than in June 2008.

State budget administrators have said the biggest factors in the drop are the economic anemia and the tax restructuring of 2005, which reduced income tax rates across the board by 21%, cut or eliminated certain business taxes and made other changes.

The economic impacts became clearer with the close of tax filing season, after which Gov. Ted Strickland's administration revised its already dampened financial projections and later announced the state faced a roughly $1 billion deficit for FY 2009. That hole was filled with the drainage of the Budget Stabilization Fund, which now stands at 89 cents.

Last fiscal year was the third in a row in which the state collected less tax revenue that the year before - a streak that's also considered a record. Mr. Kohlstrand said the agency could only find three other years dating back to 1957 in which such declines occurred.

The changes in fact did not ameliorate the impact of the recession as predicted by the supply side faithful and anti-tax geniuses that had insisted this would be the case. Why not? Tax cuts work in every situation.

It seems event the magic elixir of unbridled tax cuts didn't do the job of protecting the rust belt capital from the effects of the Great Recession. Maybe a more moderate and you know, sensible regime of changes would have left us a more sustainable budget structure.

This latest budget and future budgets will not be made right until someone has the courage to patch the flawed tax reforms of General Assemblies past.

From The Beach To The Moon

Vive Le Tour!

The 96th edition of the greatest of all bike races kicks off in Monte Carlo tomorrow. Free up space on your DVR and settle in for the next three weeks.

This year's TDF offers a time trial in Monaco, a relapse of the notorious team time trial, a slew of classic climbs and of course the penultimate stage finish on Mt.Ventoux. That one will be epic.

The smart money is on 2007 champ Alberto Contador who is a teammate of The Boss, Lance Armstrong. I doubt the seven time winner will be able to contend in this field but I wouldn't be surprised to see him steal a stage or time trial win. My guess is that he will be relegated to super domestique for most of the tour.

My top three in no particular order:

1. Alberto Contador - has to be the favorite even though he missed last year

2. Cadel Evans - cuddles has been quiet so far but look for him to be in the hunt.

3. Andy Schleck - I think the younger of the brothers Schelck has GC potential this year.

I would put the over under on positive doping tests at three.

Divining Truth From The Palinisms

Sarah Palin is stepping down as Governor of AlASka and the talking heads on CNN are actually trying to discern some logical rationale for the move.

CNN also played the rambling ten minute speech given from the unofficial state capital of AlASka, the Palin residence. It went in more directions than a country crossroad at times sounding like a victory speech and then a polemic on Obamanomics. She's was also quick to lash out at the media and critics in her classic paranoid fashion even mentioning past ethics investigations of her administration.

I don't know what is more curious a thing to take away from the event. Trying to divine the actual motive behind Palin's quitting is perplexing enough. Then watching cable news guys assuming there is a calculated and strategic element to the announcement is just as curious.

I'm guessing she has either been offered her own show on Faux News or she is going to be indicted on some kind of ethics charges very shortly. Maybe she sees opportunity in a potential GOP contender for president being taken out of contention by his infidelity. Keep you eye on the ball.

Giant Purple People Movers Invade Akron

Akron METRO had unleashed new purple buses on the highways traversing the Akron-Cleveland highway corridor. The local transit authority has revamped the express bus fleet with newer more colorful rides.

Not only was the nearly $3 million cost of new buses covered with ARRA dollars but the purple machines come with bike drawers and will soon be WiFi equipped. Yet another move towards public internet connectivity in Akron. An email sent by METRO announced the rollout of Molly and her purple friends:

New NCX Buses Are Here

Six new buses are being put into service on the NCX express routes. The new buses have a vastly different look to them and will be eye catching, to say the least. Eventually they will be WiFi enabled. The bike racks are in a "drawer" under the bus and the operator will be able to show you how to use it.

If you haven't seen one yet and would like to see a photo of the bus email Molly at communications@akronmetro.org

Thank you for your patience with our current fleet and we hope you enjoy the new buses. Each bus cost $497,000 and was purchased with stimulus funds.

The use of stimulus dollars is good in a couple of ways. The purchase of new buses demonstrates how the dollars are finding their way down to the local level. And with $3 million freed up METRO can think about dialing back the rate they charge for riding the North Coast Express.

That wold be the rate that was increased even after voters approved a sales tax increase. Did you think we forgot?

Shedding The Taint of TARP

An interesting dichotomy is emerging in the banking industry as of late. Large money center banks are bowing out of the Treasury capital assistance program affectionately know as TARP. At the same time smaller regional banks are more than willing to hold on to the capital and are not concerned about blemishing their reputations.

Big banks are doing their best to jettison TARP dollars and repurchase the associated warrants the government took as a condition of assistance. Large banks are making it crystal clear they don't need the money and are giving a mission accomplished reason for the change in disposition.

Ditching TARP is being used to convey a sense of strength and independence to investors and customers alike. Big banks are making every case they can to wiggle out of the grand bargain offered to them in the darkest hours of the financial crisis of 2008. For example, the form letter below is being sent out by U.S Bank to it's commercial customers to extol the virtues of being TARP free.

US Bank TARP Memo - Get more Business Documents

Meanwhile in the realm of smaller more humble banks the landscape is much different. A article appearing in the WSJ and cited all over the internet reveals that smaller regional banks have been more than happy to hold on to their TARP allocations. Apparently the smaller more sensible banks have decided to meet one of the objectives of the program - provide credit for business investment.

The behemoths on the other hand are more concerned about demonstrating they can maintain adequate capital levels without help from Treasury. Extending credit to small businesses is ancillary at best. The other perk of course is the ability to dodge executive pay caps and somehow prevent the inevitable regulatory smack down that is on the horizon.

Another Don Dynasty

There's been oodles of attention paid to the failed recall attempt of Don Plusquellic but another Mayor Don has escaped recent notoriety from critics.

The chatter amongst the Dems and political elite in Cuyahoga Falls that Mayor Don Robart was looking vulnerable to a challenge from a Democrat. Abe Zaidan had written about the waning of the Robart's power back in January. The local opposition it seems, was adamant that this was the year to unseat the Don of CF.

I too had heard from people close to the situation that 2009 would be a watershed year in the city o f CF. There was a feeling Robart had overstayed his welcome on Second Street and there was supposedly some blood in the water (meters) after several Robart initiatives had met stiff resistance from the Democratically controlled council. The days of unchallenged directives have disappeared now that they controlled city council.

With the stars aligned and plenty of ammunition to go after Robart with in the general election there would be a strong chance of a challenger filing to take on Robart this fall. What's that you say? No Democrats filed at the Summit BOE to run against Robart? The most under reported story of the week is that there will be no Democratic challenge to the long-time Falls Mayor. So much for striking while the iron is hot.

There is a remote chance someone could file as an independent after the primary. Typically you don't see that sort of thing in local elections but, you never know. Maybe the banished Kevin Coughlin will abandon his quixotic campaign for governor and re-brand as an independent.

Photo: Falls News Press

Akron Recall: An Epilogue of Sorts

With the recall business in the rear view mirror it's time for Akronites to start the healing process or at least stop laughing about the results. There are some lessons learned from this odd detour from the rational discourse of our city's future into the bizarre obsession of one man.

Firstly, the mayor is not an infallible or unassailable political tour de force. Sure the guy has great hair and a square jaw but there was never a claim that he's perfect. There have been brash statements, public fits, feuds with the police and the failed sewer lease plan. Aside from the sewer thing (which I was critical of here, here here) there was nothing that warranted a bona fide public campaign to remove the mayor. That was accepted early on.

As dumb as the recall attempt was the process did afford the citizens of Akron a unique and comprehensive review of the Plusquellic years. Once observers were able to filter out the noise created by the Mendenhall Syndrome a reaffirming picture of Plusqeullic's tenure emerged. This cleansing was so pronounced that it actually resulted in nearly 5,000 more votes being registered in support for Don in the recall election than in the general election. Perhaps the lunacy of the recall effort also motivated people to get to the polls on a Tuesday in late June.

I mentioned in my last post that we should be devoid of Warner for at least three months. He has hinted at another attempt to hoist term limits on the voting populace. He is also trying to establish a puppet regime with his wife now planning to run for city council. I wouldn't rule out other forms of instigation involving the Akron FOP or maybe a caper involving Joe Finley. At any rate it may not matter what Warner's next act is. The recall debacle has cast a considerable shadow over his reputation, whatever that was.

Two more requiems on the Mendenhall Affair that are worth checking out were posted by The Pho and Abe Zaidan. Both contributions are much more eloquent than anything that I have attempted to convey on these pages.

High Noon In Columbus

The State General Assembly is still mulling, no agonizing over how to bring Ohio's next biennial budget into balance by next week. So far massive spending cuts and an anemic attempt at raising revenue from slot machines are the only means to achieve that end.

The cuts have hit just about every area of the State's operations including libraries and social programs. Of course there has been no serious push at rolling back at least part of the income tax cuts enacted in 2005. Although the Dispatch has reported on a small band of Dems that have requested a tax increase in lieu of the deep spending cuts. It looks like no new taxes and no new books will win out.

In a new development the Governor had requested a meeting with all elected State executives at noon today. I know this because State Treasurer Kevin Boyce was supposed to speak at a state sponsored training seminar today but was not able to attend. His staffer explained that Boyce and his elected colleagues had been summoned by Strickland to come and offer up "more blood from their respective turnips", the staffer's words not mine.

This move is interesting because much of the attention has been directed at cutting programs administered by the Governor's cabinet agencies. We'll see if the individual elected officials will be willing to sacrifice more of their kingdom to the alter of spending cuts.

Akron Recall: Game Over

I'm not waiting for the polls to close to call this thing. With very little knowledge or insight my gut tells me the recall is going down in flames.

As of now the recall of Mayor Don Plusquellic went down to a thirty point defeat. Total ballots cast 11,200 against, 4,800 for and 1 undecided (Joe Finley). God I hope I'm right about this.

Anyway, I voted at 6:30AM with about ten other inhabitants of 8's N and Q. The same crew was manning the polls but they were a tad confused. I find that the elderly function much better with an infusion of fiber to start the day.

The recall defeat should buy the citizens of Akron at least a three month reprieve from the minions of Mendenhall.

Update: I was a little off. The number of total votes cast was 24,133. It looks like the piker rebellion of 2009 will go down by 40 plus points. I'm sure Warner has already concocted a worthy conspiracy to explain the trouncing.

Akron Recall: The Mendenhall Syndrome

June 23rd can't come soon enough. At this point I'm not even concerned about the results of the special election. What the arrival of that day really means for me and other citizens of Akron is the removal of Recall Warner from our lives. As Lady Anne exclaimed in Richard III , "thou dost infect my eyes!", and Mendenhall has been infecting our eyes, ears and sensibilities for the past year.

We have all been exposed to the Mendenhall Syndrome. Aside from being an insufferable whiner Warner's symptoms also include a preoccupation with conspiratorial delusions about Mayor Plusquellic. The mayor shouldn't take it so personally, there have probably been scores of other people that have been directly exposed to this virulent strain.

The most recent example of the affliction was the immediate condemnation of the roll-out of the first phase of the Connect Akron venture. To the casual observer the introduction of a public wireless network is a good thing.

Those afflicted by the syndrome see a calculated plan to buy votes by timing the announcement. Somehow Don was able to cajole the dudes stringing fiber and installing access nodes all over Akron to finish right before the recall election. The guy has impeccable timing alright. If he is that good of a manger then sign me up for four more years.

Then the 1,000 or so new jobs announced by PlusOne Communications, a new call center start-up in downtown were identified as a transparent scheme to garner votes. To the mentally lucid observer the announced job openings are a desperately needed shot in the arm for an economy that continues to suffer from unemployment.

Perhaps Warner didn't see the latest unemployment numbers. I thought he was unemployed. You'd think he would be standing in that line at the old Firestone Bank building.

Comments Are Not News

Someone please inform the folks at the Beacon that reader comments on the paper's website are not news. This is true even if the comments are from the friends of Tom and Howie. Good taste would dictate to refrain from quoting a reader comment in a news story.

Ohio's Green Shoot Deficit

Just as State lawmakers are embroiled in the impossible task of solving Ohio's budget woes more historically bad news on the jobs front is emerging. It's no surprise that the mild signs of a relenting downturn seen elsewhere are not sprouting en mass in the Buckeye State.

A review of the ODJFS employment report by George Zeller with the think tank Center for Community Solutions points out the painfuil truth:

The new May employment figure for Ohio extended Ohio's horrible lengthy sup-par job growth streak. This lengthy streak of 159 consecutive months when Ohio's job growth has been slower than the USA national average is an all-time record in the history of Ohio. The state has now gone 13 years and three months with its job growth continuously below the USA national average, including all months during those 13 years.

In May 2009, Ohio's year over year job growth rate was negative at -4.9%. The May 2009 job growth rate in the United States was sharply negative with a decline of -4.3%. The more than 13 full years of sub-par job growth in Ohio is certainly the most serious chronic problem that Ohio faces today.

Zeller holds no qualms about letting the bad news out of the bag.

So Ohio will continue to be mired in an under-employment slog for the foreseeable future. Even when the official end of the recession is discovered by economy watchers Ohio's job outlook and economic vitality will not rebound anytime soon.

The position we are in is mostly a reflection of the decimation caused by the evaporation of manufacturing jobs over the past two decades. Policy makers and GOP candidates for governor should keep this fact in mind as they prepare to make a case for leading the State out of this mess.

Cheneyism Spreads To Israel

Iran is in the midst of political uprising that has revealed a collective desire for more moderate leadership. The mass demonstrations and calling out of the clerical leaders seems to be a good thing. You can see why the country's younger and liberal (socially) populace is so important. The young Iranians could serve as crucial catalyst for capitalizing on America's use of soft power with Iran to unwind their nuclear ambitions.

Leave it to the neocon elements in the U.S. and their Israeli counterparts to find a problem with the hopeful signs in Iran. First it was Diane Pletka's column in the NYT that threw cold water on the notion that the current upheaval will lead to anything good in the end.

Then there was this piece in the WSJ (s/r) that corroborates what the neocon line should be on this matter. Any signs of moderation in Iran are bad for the bomb-bomb-Iran-crowd. Case in point:

Meir Dagan, chief of Israel's Mossad intelligence agency, told a closed Knesset ommittee hearing that Mr. Ahmadinejad's reputation as a Holocaust-denying rabble-rouser makes it easier for Israel to enlist international support against Iran's nuclear program, a committee member said. A victory for Mr. Ahmadinejad's moderate challenger, Mir Hossein Mousavi, in last week's presidential elections would have presented Israel with "a graver problem," Mr. Dagan said.

You see, we need crazy Ahmadinejad to stay in power so there is a reason to sell the hard line approach to Iran.

"Both of them pose the same threat. But it's better for Israel that you have a leader [in Iran] with a very dangerous ideology who speaks clearly so that nobody can ignore him," said Knesset deputy speaker Danny Danon, a member of Prime Minister Benjamin Netanyahu's Likud party. A more careful, soft-spoken Iranian president who promised better relations with the West "would have made it harder for us to recruit the world to our side," Mr. Danon added.

You got that? More crazy leadership equals better chance of starting yet another war in the Middle East. That's what the crazies in our neck of the world think. Good if you are an oil company or a defense contractor. Not so good if your son or daughter is the one that will be thrown into another needless military engagement.

The Fifteen Minute Budget Solution

Lawmakers in the Ohio General Assembly are just about done freaking out about the number $3.2 billion. Do you know how far 3.2 billion Tim Grendells stacked on top of each other would reach? Once the legislators have regained their footing they will have about fifteen days to reduce the projected shortfall in the FY2010 budget by that amount, seems like a daunting task. I sure hope that doesn't effect my life.

The gigantic budgetary gap caused in part by a cliff diving economy and a budget analysis apparatus instructed to keep things rosy will have to be closed within a short amount of time. The General Assembly conference committee has until the end of the month to get a balanced and realistic budget to the governor. How does a such a massive undertaking get completed on time? I am suggesting that rather than fifteen days the whole thing can be solved and wrapped in neat bow in fifteen minutes. Sounds facetious and politically improbable doesn't it?

Yes to Cuts

There will invariably have to be deeper cuts to programs and staffing. Perhaps the idea of an enforceable and State-wide earl retirement program could achieve savings within the two year horizon of the FY2010 budget. Mandatory furloughs are also in order. The State Treasurer and Attorney General have announced a steep two week furlough program all employees. Holy Mary Taylor and Jennifer Brunner are also "considering" a furlough measure for their respective offices.

Staffing takes up a large portion of administrative budgets in government entities. The need to further reduce staffing through layoffs will have to be considered. This will impact delivery of
services. The remainder of the cuts will have to be to programs. Everyone has their pet projects so agreeing on additional program will not be easy.

Jim Sigel's piece in today's Dispatch points out the difficult nature of whittling down the State budget to a discretionary core of programs ripe for cuts. Still, more reductions will have to be attained to meet the target. Those will most likely be done in a back room away from prying eyes of media and advocates.

In the end I don't see more than a few hundred million being cut from the existing lean budget proposal. This budget process will not be used as a de facto method for deconstructing State government into a model for Tea Party visionaries.

Yes to Creative Finance

Before moving on to revenue I should dedicate some space to what I call creative finance. No, that would not include investing in rare coins or drilling the shit out of the State parks. This category of budget fixes is reserved for creating new revenue sources or using financial tools to create new payment streams.

The most viable solutions in the near term are casino gambling and securitization of assets. Casino gambling has been bandied about for years and invariably gets voted down by the legions of puritans that inhabit Ohio's towns and villages. Creating the legal framework for casino gambling, one that focuses on gaming districts in a few select large urban centers could pay off. Siegel uses an estimate of $200 million over two years of ongoing revenue for this source.

We could dust off the plan to lease the Ohio turnpike. The last attempt to securitize this asset was championed by political loser and right-wing blowhard Ken Blackwell. Under the umbrella of a rational and carefully reviewed plan the State could realize a substantial revenue stream (billions) for a long-term lease agreement of the tollway.

Of course this would be a one time revenue stream and some of that money would have to be used to offset road improvements to the other highways in Ohio. The other caveat is the potential "tax increase" that Ohioans would face when the rates on the turnpike are increased by the private entity that operates the leased tollway.

Yes to Tax Increases

The last option is the most effective but least politically feasible of all budget fixes. The key members of the Senate, House and administration can meet at a local Applebees and agree to raise some tax rates. The numbers provided by Siegel make it clear that there is ample capacity to bridge the budget gap with tax rate increase alone. The tax increases could be kept in check if they are coupled with fixes from the spending cut and creative finance pots.

This move would require some very hard headed people to accept the premise that tax revenues have fallen to perilous levels in part because the tax reforms of 2005 were untenable and unrealistic. There will have to be some ratcheting up of income tax brackets in order to get the budget above water. The other change to tax rates will have to be the misunderstood CAT.

The commercial activities tax was implemented as part of the HB66 reforms as a low tax with a very broad base. The results on the CAT are still inconclusive but a slight increase to the already low rate would go a long way in increasing tax revenue. These changes may be enough to get us in balance while avoiding tinkering with the more regressive sales and property taxes.

There you have it, over $3 billion in fifteen minutes or less. Enjoy the potato skins gentlemen.

Home Rule Rehash

The lights are slowly coming on for the purveyors of local print media when it comes to last weeks SCO ruling on residency ruling. The order to uphold a state law banning residency requirements as term of employment certainly did in the idea of employees having a vested interest in the communities they protect. The real change to the local governance landscape was of course the signal that that the home rule provision in the Ohio constitution was in fact shown the door by the high court.

The majority of the immediate reporting focused on the high fives and histrionics that took place around various city halls and union halls around the state. The police and fire unions had at last exacted a bit of their own justice on the city leaders that have oppressed them for so long. Mayors and managers were apoplectic that the myopic court would render such a deleterious ruling in nonchalant fashion.

While there has been some coverage of the impact on home rule, we are still stuck on the clash of two rival interests described above. I have argued that the provision is now dead and there will be a cascade of impacts on the way localities govern themselves.

For some background on why home rule is now an endangered species I would direct you to a fine piece of reportage by Henry Gomez at the PD. Here the detail behind the court decision and the relevance of Section 34 of the state constitution is parsed. The officials that Gomez quotes reveal the ruling as a gateway drug for power hungry state assemblymen looking to meddle in the affairs of the urban centers of Ohio. First it was predatory lending, gun laws and red light cameras. Next it will be income taxes, employment policies and economic development. The next few years will indeed be indicative of how badly this thing could end up for cities.

Home Rule Goes Poof!

The home rule provision of the Ohio Constitution was laid to rest today by the Supreme Court of Ohio. Today it's residency requirements tomorrow it's income tax rates or something else. The 5-2 ruling upholding a State law barring the residency requirements was to the delight of police and fire unions and the dismay of city officials all over Ohio.

I guess this decision was inevitable. The State Supremes and the General Assembly have been hostile towards the very precept of local control of governance when it comes to large cities in the north end of the state.

Here are some points on the now defunct residency requirements and a sort of postmortem on our dear friend home rule.

Residency Lost

Police unions in particular are happy about the overturn of the requirements in Akron and Cleveland. I suspect Cleveland is going to be worse off than Akron or Lima. The Cleveland Police Department is already redeploying as a hired mercenary force at this hour. I hear that the County Land Bank is willing to buy up all the vacated homes left by police and fire guys fleeing Cleveland proper.

Many will choose to leave their respective cities and live elsewhere.
Still there are plenty of people who will stay in Akron or Cleveland
for a variety of reasons. What makes a community livable and a desirable to live in? Some would say it's all about the schools. Safety and decent neighborhoods are just as or more important. Of course the State is getting to work on fixing school funding so that will negate the school system variable soon enough.

There is still a need to get public safety employees especially police forces to be cognizant of the community vibe so to speak. The residency requirement was sort of a forced fit in trying to attain that end although it was also an assurance to city finance directors of a certain level of captive income tax revenue. It was never perfect and has bred some animosity between the rank and file and city management. This pervasive tension was probably counter productive to the achieving the better effective policing and healthy relations with the community. Akron's steps to strengthen community relations with a citizen review committee can be a positive force in offsetting the lost residency requirement.

I suspect the decision will be a morale booster for public safety forces. The eradication of a perceived hardship could renew the outlook a lot of public safety workers, I hope. There's always something to complain about in ANY line of work (present company included) but this change may translate into better dialogue and respect between both sides.

Wither Home Rule

Here is an aphorism that I just made up, "Everyone likes activist judges
when the decision falls on their side of the policy argument". This one ruling has changed the local governance landscape. The majority's dependence on Section 34, Article II in particular will leave the door open for more home rule erosion.

What is the future of home rule now that Ohio's merry band of Republican justices have struck such a harmful blow to the provision? Will this ruling impact the way cities govern themselves in other areas besides employment practices? How does a mayor or city council evaluate a policy initiative that would seemingly rely on the once safe harbor of home rule?

I think going forward there will be a chilling effect on local governance. One that could inhibit local leaders from thinking boldly when it comes to addressing challenges (think red light cameras and gun ordinances).

With the residency card pulled from the deck, cities may want to find ways to incentivize employees to live in city limits. There are no doubt numerous carrots that could be offered as a way to entice people to remain residents. As a mayor faced with eroding home rule power do you even bother having staff evaluate and assemble policies that could be wiped out by a legal opinion? Who's to say income tax or property tax abatement offered as an enticement to keep resident employees aren't on shaky legal ground now?

Dead Idea or Not?

I just finished reading The Tyranny of Dead Ideas by Matt Miller and think his book speaks to the death of the residency requirement. A dead idea is a conventional wisdom that has reached the end of it's useful life of determining policy outcomes. Perhaps when residency requirements are looked at in conjunction on with regionalism, tax sharing and other 21st trends in local governance their shelf life looks past due.

That may be the case for a policy like residency requirement that had limited application and mixed results. My fear is that home rule is next up for elimination and that would not be good.