March 30, 2006

EDITORIAL

Squeezing local governments dry

Whether it was planned or just a coincidence (and it was likely planned), the timing was perfect. There was Village Manager Eric Swansen at Council’s meeting last week presenting the 2006 budget and laying out in plain English how the Village has a mountain of capital projects and few funds to pay for them. Then, a short while later, there was Mr. Swansen again giving a presentation, this one on a constitutional ballot issue that could severely hinder the ability of the Village, and other local governments, to raise funds to pay for those many capital projects.

Mr. Swansen was talking about the Tax and Expenditure Limitation (TEL) amendment, which will appear on the November ballot. The proposal is the centerpiece of Secretary of State Ken Blackwell’s run for governor. Mr. Blackwell, a Republican, argues that the TEL amendment would rein in wasteful government spending.

Don’t believe him. This proposal would put a chokehold on most governments’ chances to respond to the needs of their communities. As Mr. Swansen showed in his two presentations last week, the TEL amendment would exacerbate the Village’s precarious budget position. The spending cap would make it “pretty impossible, I think, to do capital improvement projects, at least the big-ticket items,” Mr. Swansen said. The measure could lead to staff cuts and impede the Village’s ability to recruit new workers.

But TEL’s squeeze wouldn’t stop with the Village. It would also hit Miami Township, the Yellow Springs school district and Greene County agencies, such as the library system, social services, the parks and even the county engineer’s office, which uses funds from a property tax levy to maintain and replace bridges.

The TEL ballot issue would limit annual spending increases by state and local governments to 3.5 percent or the combined rates of inflation and population growth — whichever is higher. Such limits would make it more difficult for local governments to give cost-of-living raises to public employees, pay for increases in health insurance or complete necessary capital projects.

However, the most troubling, and misleading, aspect of the TEL amendment is that it appears to create different criteria for local governments and the state to alter the spending cap or raise taxes. A provision in the amendment would require local governments to get approval from “a majority of electors” to raise the spending limit, create a new tax or increase an existing tax. The problem is that an elector is defined as a registered voter. This means that under the TEL a local government would need the approval of a majority of registered voters — not just a majority of voters who show up at the polls — to increase expenditures or taxes.

An analysis by Mr. Swansen showed that if TEL were in effect for the November 2005 election, approval from 99.7 percent of the Yellow Springs residents who voted would have been needed to pass a hypothetical Village spending plan. The Plain Dealer in Cleveland reported earlier in March that a study by two Cleveland State University professors determined that low voter turnout would make it “nearly impossible to raise school taxes” under the TEL standards.

On the other hand, the state would need only the approval of a “majority of electors voting” to amend spending limits. The inclusion of the word “voting” in this provision makes it much easier for the state to increase spending. Either the TEL proposal was put together in a slapdash manner, or Mr. Blackwell and his supporters are trying to deceive voters and tie the hands of local public officials across Ohio.

Fortunately, there’s plenty of time before the Nov. 7 election to learn more about how the TEL amendment’s dangerous consequences would affect governments, schools and public programs throughout Ohio. And, who knows, enough public outcry could even stymie Mr. Blackwell’s run for the governor’s office. After all, he’s the man responsible for getting the TEL proposal on the ballot.

—Robert Mihalek