CLEVELAND – Over 725 city government employees here, including 430 safety force workers, were given layoff notices Dec. 5 as the city faces a $61 million deficit in its general fund.
The job cuts, amounting to 8 percent of the city government work force, will severely strain or reduce safety, sanitation, street maintenance, parks, recreation and other services provided to Cleveland’s 500,000 residents.
Mayor Jane L. Campbell said at a Nov. 24 press conference that the immediate cause of the projected shortfall is twofold: a decline in revenues from city income tax, state subsidies and federal funding; and a continuing rise in costs due to small annual wage increases in union contracts and skyrocketing costs in health insurance and gasoline.
Campbell noted that for the past two years Cleveland has staved off a budget crisis by using its rainy day fund and other one-time sources, which now have been used up.
At a deeper level, however, the causes are the disastrous economic, social and budgetary policies of the federal government.
The single largest source of city revenue is its 2 percent payroll tax. Due to corporate downsizing and capital flight encouraged by federal trade policies and failure of the federal government to invest in infrastructure renewal, Cleveland has lost 25,000 jobs – 8 percent of its work force – since President Bush took office.
“This is the equivalent of a cumulative reduction of $1 billion in payroll paid to Clevelanders since the end of 2000,” Campbell said, adding it has caused tax revenues to fall $18 million a year.
Ohio, with its heavy concentration of manufacturing, has lost more jobs than any other state except New York and California and the state government, also in fiscal crisis, is “disinvesting in the City of Cleveland,” Campbell said, resulting in a $4 million cut in assistance this year.
“The federal government shows decreased support for our city,” she continued. “The Community Development Block Grant is now $1.1 million less than it was in 2000. Washington, D.C.’s abandonment of urban centers continues. Programs designed specifically to assist Cleveland’s elderly, its most impoverished citizens, and critical neighborhood improvement efforts continue to serve as the sacrificial lambs of the federal government.”
Campbell said that cities across the U.S. are facing similar financial crises, citing Pittsburgh, New York, and Detroit as examples.
The war in Iraq, strongly opposed by both Campbell and the Cleveland City Council, has been a major drain on resources otherwise available to cities like Cleveland. According to estimates by the National Priorities Council, had the $121 billion so far appropriated to Iraq been available to U.S. cities, Cleveland would have received $141 million, more than twice the deficit.
But, as Washington Post writer Neil Pierce recently noted, the war is only one of a number of federal policies devastating U.S. cities. In addition, he listed the $1.7 trillion in tax breaks to the super-wealthy, the $248 billion in subsidies to agribusiness, the $125 billion in subsidies to pharmaceutical and insurance companies under the new Medicare prescription drug bill and the $23.5 billion in tax breaks to oil and gas companies Bush is pushing for in the energy bill.
With all this welfare lavished on a tiny group of corporations and the super-rich, it is an outrage, urban officials say, that the Bush administration continues to deride urban assistance for education, safety and housing as some kind of “handout.”
Speaking to the National Press Club Dec. 1, John DeStefano, mayor of New Haven and president of the National League of Cities, said, “Cities and towns are not the children, nor are we the creatures, of America,” he added. “If anything we’re the creators.” Federal policies that underfund education, safety and public transportation and allow health costs to skyrocket, DeStefano said, “subvert the American ideal.”
The crisis that has erupted in Cleveland and several other cities is only the tip of the iceberg.
As the National League of Cities holds its annual convention in Nashville, Tenn., this week, it released its 19th annual survey of city finances, which reported 81 percent of U.S. cities face mounting fiscal stress and are less able to meet their needs than a year ago, the highest rate since 1990. The NLC has 18,000 affiliated cities and towns with a combined population of 225 million.
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