October 29, 2013
Election Day 1 week away - what's in your vote?
It’s not often that an Election Day featuring just local elections and no state or federal races is considered crucial, but this is one of those years. The November 5 general election will determine Mayoral races, City Council openings, tax levy proposals, school board positions and ballot issues in the Cincinnati USA region. The importance of each of those is why your Chamber has reviewed and is presenting for your consideration candidates and issues in the central business district, the City of Cincinnati and Hamilton County. We hope the overviews below can be used as guides to educate you on the candidates and issues best supporting the business community. For more information on the upcoming election, please feel free to contact Jason Kershner, Interim Managing Director of Government Affairs, by email or at 513.579.3120.
Cincinnati will elect a new Mayor for the first time in eight years, and the stakes couldn't be higher for the business community. Cincinnati is in the midst of a modern renaissance, yet the fiscal health of the City continues to decline. The Chamber hopes the new Mayor will demonstrate the necessary leadership to address several City issues impacting the business community, including the following:
- Structurally balance the budget for the first time in 12 years.
- Address the $862 million pension liability.
- Support the growth potential of all businesses in the City by supporting fair and reasonable government contracting requirements.
- Provide certainty and clarity regarding the Cincinnati Streetcar Project and the Parking Modernization Lease.
- Stop the steady increase in property tax rates and trash fees on businesses.
ABOUT THE CANDIDATES:
Cincinnati Vice Mayor Roxanne Qualls has spent several years in public service as a member of City Council and as former Mayor. John Cranley has also served as a member of City Council and currently works in the private sector as an attorney. Both candidates are Democrats, but they differ on a couple of key issues: the Streetcar Project and the Parking Modernization Lease. Qualls supports both initiatives, while Cranley opposes both. Aside from these two prominent concerns, the candidates differ in their main messaging to voters. Qualls has emphasized the importance of continuing the progress and innovation to help Cincinnati compete nationally and globally, while Cranley underlines the need to refocus on the basic services that enable any city to prosper.
The Chamber partnered with the Cincinnati Enquirer, WCPO-TV, the League of Women Voters, the Cincinnatus Association, the Hispanic Chamber of Commerce, the African American Chamber of Commerce, the Over-the-Rhine Chamber, and the Queensgate Business Alliance to produce two live debates during the past months of campaigning. The debates can be viewed below as a resource when deciding which candidate to support.
Watch the September 17th debate:
Watch the October 15th debate:
There are 21 individuals running for nine Cincinnati City Council seats and, for the first time ever, Council members are being elected to serve 4-year terms beginning this December. The Chamber believes this City Council election is extremely important given the complexity and depth of the challenges facing City Hall, starting with the fiscal health of the city. Moody's Investor Services has downgraded the city's bond rating from Aa1 to Aa2 with a negative outlook. The reason for the downgrade was the $862 million liability facing the Cincinnati Retirement System pension fund (read why the Chamber opposes Issue 4 below) - and the fact that the city has not had a structurally balanced budget for 12 years. Businesses look at the financial stability of local governments when considering investing in the local economy, and the next City Council will need to address these financial issues with practical business sense.
As the largest business advocacy organization in the City of Cincinnati, the Chamber feels it is important for us to help educate the community on where the candidates stand on business issues. The 2013 Cincinnati City Council Candidate Scorecard
is the result of a task force of 15 Chamber members spending more than 25 hours to interview all 21 candidates and review their answers to a 24 question survey. The scorecard differentiates the candidates through their positions in five business categories: tax policies, fiscal responsibility, competitive labor policies, responsible government, and economic development.
While not an endorsement, the Chamber has identified through the scorecard the following candidates who we believe will best represent the business community as members of Council. Amy Murray was the only candidate to receive the highest rating in all five categories, followed by P.G. Sittenfeld, Charlie Winburn, Christopher Smitherman and Greg Landsman, who all received the highest rating in four of the five categories. Kevin Flynn, Vanessa White and David Mann rounded out the top eight candidates having scored the highest rating in three of the five categories.
There are nine candidates for the four open seats on Cincinnati's School Board, the governing body of the Cincinnati Public School District. Responsibilities of the Board include setting education goals, establishing policy for the system, and making decisions on a wide range of issues including budgets, hiring the Superintendent and Treasurer, engaging parents, and being good fiscal stewards of taxpayer dollars.
There are complex issues looming for School Board members. CPS teachers' current three-year contract expires on December 31, 2013. The School Board, with four new members, will need to keep a sharp focus and firm control on contract negotiations that have to implement or institutionalize salaries and new pay-for-performance criteria.
Leadership will be critical as controversial programs start to take hold in 2014. These programs include the third grade reading guarantee, which requires a student to repeat the third grade if he or she is not reading at grade level. For individuals and parents, this presents many challenges and for school systems, the reading guarantee can mean additional costs for new teachers, tutors and reading specialists. Similarly, big changes confront teachers who will be subjected to a new job review system that will, for the first time, tie job evaluations to their students' academic growth. This new system will impact how teachers are hired, promoted, and paid. Schools are under a new kind of school report card system, too, that was revised last year. Ohio now grades schools on an A-to-F scale that applies to school districts, traditional public schools, and charter schools. The A-to-F system replaced Ohio's previous school rating system that gave schools labels like "Excellent" or "Continuous Improvement". While the A-to-F system will be phased in over time, change will be a constant.
ISSUE 1 - Tax Levy: Cincinnati and Hamilton County Public Library
"A renewal of a tax for the benefit of the Public Library of Cincinnati and Hamilton County for the purpose of providing funds for operating expenses and capital improvements at a rate not exceeding one (1) mill for each one dollar of valuation, which amounts to 10 cents ($0.10) for each one hundred dollars of valuation, for ten (10) years, commencing in 2014, first due in calendar year 2015."
This tax levy renewal continues a tax of 1 mill on residential and commercial property in Hamilton County for a 10-year term. The purpose of the levy is to provide funding for the Public Library of Cincinnati and Hamilton County, including staffing, operating costs, and facilities maintenance.
The levy would produce $181 million over 10 years beginning in fiscal year 2015 or approximately $18.1 million per year. The owner of a house with a market value of $100,000 would pay approximately $30 a year, the same as currently paid.
Under Ohio law, the Hamilton County Commissioners were required to place this issue on the ballot after the governing board of the Public Library of Cincinnati and Hamilton County voted to place this 10-year levy before voters in November 2013.
The Chamber supports Issue 1 and recommends a YES vote given the significant impact the Library has on the economic vitality of our region and the fact the levy is a renewal and not an increase.
Chamber support is based on the obvious and inherent value of a public library system within an educated and progressive community, especially a library system with the strengths and qualities that characterize the Cincinnati-Hamilton County system. The Chamber does not want those nationally recognized qualities to erode or regress. This is a renewal levy – not an increase – and it was judged that the cost of the levy is fair to Hamilton County homeowners. The Library has shown good stewardship of its locally based public funding. Ultimately, the value of the Library’s services is judged to be an integral part of our community’s educational, social and cultural make-up.
There were concerns about the levy -- although not with the Library’s services, per se -- but with length and financial oversight. The proposed levy has a 10-year term, while most renewals are five. Second, there were concerns that the Library’s finances, expenditures and related operations were not independently reviewed, for example, by the Hamilton County Tax Levy Review Committee. It was felt that this review would add transparency to the Library’s monetary and financial standing, offering a clearer look at the levy request and adding confidence to the decision to support the levy renewal. In the future, the Chamber encourages the Library to participate in an outside review of its finances.
The Chamber supports Issue 1 and recommends a YES vote.
ISSUE 2 – Tax Levy: Hamilton County Cincinnati Zoo & Botanical Garden Tax Levy
"A renewal of a tax for the benefit of Hamilton County, Ohio, for the purpose of providing or maintaining zoological park services and facilities at a rate not exceeding forty-six hundredths (0.46) mill for each one dollar of valuation, which amounts to four and six-tenths cents ($0.046) for each one hundred dollars of valuation, for five (5) years, commencing in 2013, first due in calendar year 2014."
The proposed property tax levy accounts for 23% of the Zoo’s annual operating expense and can only be used for animal care and health, horticulture and maintenance and repair. This proposed 5-year levy is a renewal of an existing 5-year levy that expires at the end of 2013. The levy will generate about $6.8 million annually, and the owner of a house with a market value of $100,000 would pay approximately $10.60 annually - the same as currently paid. The levy was placed on the ballot by the Hamilton County Commissioners at the request of the Zoo following a review by the Tax Levy Review Committee (TLRC).
The Chamber supports Issue 2 and recommends a YES vote as the levy funds part of a critical economic asset in our region while not increasing taxes on the business community.
The Zoo is viewed as a regional asset, delivering far-reaching economic benefits to Cincinnati and Hamilton County. The Zoo’s administrators have been good stewards of the public dollars contributed to the Zoo’s operations. For example, it was noted that the property tax levy contributes far less, proportionately, to the Zoo’s operations than was required four years ago. Still, this increment of public financing remains an important part of the Zoo’s financial picture. Chamber reviewers judged the overall value from the Zoo’s excellent standing to far outweigh the cost to Hamilton County homeowners. In addition, this is a renewal levy, not an increase. An analysis by the County’s Tax Levy Review Committee (TLRC) also gave a thumbs up regarding support for the Zoo levy. The TLRC’s work served as an important resource for the Chamber’s work, strengthening the Chamber’s position to support Issue 2.
Due to years of underfunding and the 2008 market collapse, the Cincinnati pension system is 61% funded with an unfunded liability of $862 million. That equates to having $6 on hand for every $10 owed to current and future retirees. Cincinnati City Council has not adequately addressed this issue, which has caused a group of individuals to create the Cincinnati for Pension Reform Committee, placing a pension reform charter amendment on the City ballot.
The amendment, Issue 4, would place future City employees in a defined contribution system, lower the cap on future accruals for current employees, cap a year’s COLA (Cost of Living Adjustment) at 3%, and would require the pension deficit to be 100% solvent at ten years. The Chamber believes the health of the pension system is of critical importance to the business community. However, along with many city officials, unions, other chambers of commerce, and Mayoral and City Council candidates, we oppose Issue 4. Pension reform is needed but there are too many unanswered questions surrounding the amendment, including the draconian payment plan and concerns regarding the amendment’s legality.