Wednesday, August 27, 2008
Times Are Tough: Help If You Can, However You Can
A couple indicators:
1. Our County's August sales tax receipts showed just how much high gas prices are squeezing citizens and the broader economy. (FYI: The County's sale tax is not collected on gas or most food sales, so when people spend more on those items and less on other non-essentials, we feel it immediately). Compared to August 2007, August 2008 sales tax receipts were down 10.8%, or $643,000, from August 2007. Perhaps most alarming, while July to August of 2007 saw a sizeable jump in tax receipts, July to August of 2008 went down. (Overall revenues through August of 2008 are down 1.8% versus the same time last year).
It's important to point out that the Count doesn't see the revenues until three months after the sales occur. So this large drop in revenues coincides with the very time (three months ago) that gas prices were peaking above $4.00. As transportation (and food) take up more of a family's spending dollars, it's clear they are spending far less on other items. They are being squeezed, and it's squeezing the rest of the economy--from small shops and large businesses, to governments like our's.
2. In the last several months, the number of people coming to our County filing for food stamps and Medicaid benefits has increased 12%. That number speaks for itself.
3. Most alarmingly, over the past several months, 35% of the total number of citizens in programs like food stamps and Medicaid are new to the system. These are people who are experiencing these challenges, to this degree, for the first time. This is a startling number, and it is one being experienced throughout the State.
Together, these three statistics paint a bleak picture of the economy's impact on individual lives.
There's a lot we at the County are doing to deal with this , with very limited resources (and these resources are also diminishing, due to state and federal cuts). Whether its identifying and enrolling those who are eligible for Medicaid, the Earned Income Tax Credit, veterans benefits, or the economic stimulus package, or even more importantly, linking thousands of people to job training and job opportunities, and reconnecting young people who have dropped out to a second chance at a degree and gainful employment, we are doing the best we can to help those in need.
At the same time, there's also a lot that citizens can do, if they happen to be doing well enough to avoid the squeeze so many others are seeing. Today, for instance, is the kickoff of the United Way drive--and the United Way focuses on some of the very solutions that are most beneficial to help people in need. There are many other ways people can get involved, or make a difference.
If you're able, now more than ever, volunteering and supporting such efforts can change the lives of those who are struggling.
Tuesday, August 26, 2008
Casino Dollars? We'll Take 'Em (But Must Spend Them Strategically)
You can go to http://www.myohionow.com/ to study the entire issue. The basics are that if approved, this issue would allow for one casino, in Wilmington, Ohio. And 30% of the proceeds will be split among Ohio's 88 counties. Hamilton County is estimated to receive just under $16M in the first year (but clearly, that should be taken with a grain of salt). http://www.myohionow.com/benefits/sharethewealth.asp. So far, statewide polls have the issue ahead--although the track record of similar past efforts has not been too good.
My Basic View
Given that Ohioans are gambling close to home every day in Indiana, Michigan, West Virginia, and Pennsylvania, and those states are investing Ohioans dollars into their citizens' priorities, I've never been troubled by the idea that Ohio join the club. If Ohio dollars can build roads, schools and help economic development in Indiana, we might as well have those dollars do the same in Ohio itself. I voted for the 2006 effort for that reason. And I wasn't the only one--a majority of Hamilton County citizens supported that effort (I suspect because they also see so much of our money going to Indiana).
The current issue, though, provides a far more direct benefit to counties than the one in 2006. The proceeds will flow directly to our general fund. And in Hamilton County, for those who choose to go to casinos, it actually will be closer to many County residents than Indiana. For those who don't want a casino in their backyard, it's plenty far away.
Ultimately, though, each voter can make up his or her own mind on supporting the issue.
Strategic and Disciplined
At the same time, I'm a firm believer that rather than scrambling around after the fact, we are best off to plan ahead in the event that this issue passes (of course, when we budget for 2009 and beyond, we will budget assuming it does NOT pass).
That's why I have asked County Administration to think through the ideal way to invest these dollars strategically, over time, and am doing the same analysis myself. Short-term, our priorities are clearly to replenish our reserves and ensure we are providing for our core public safety responsibility.
But short-, medium- and long-term, the most important thing we need to do is grow economically, create jobs, and invest accordingly. We have to better compete to bring in new jobs and businesses, we have to retain and grow our current jobs and businesses, and we have to connect our citizens to those jobs. That work takes infrastructure, site development, redevelopment of "brownfields" and "grayfields," and proactive retention and attraction efforts.
And if you look at our budget picture today, and compare it to other counties, where we are truly lacking is a robust and strategic economic development approach that does these things. Compared to other counties, we aren't investing in creating economic growth, or good sites or infrastructure for economic and job growth, so we don't get enough of it as a result. (The G.E. and US Playing Card decisions are just two recent examples where our financial incentive package was competitive, but the sites we offered were not). All this leaves us with fewer overall dollars in revenues to fund the basic services that our citizens rely on.
Which is why the formula of how to spend these potential casino dollars should balance our near-term priorities (budget crunch and public safety) with this critical need to grow economically. Only that growth strategy will put us where we need to be over time. More to come as we develop that strategy. (And even if the casino doesn't pass, this is something we must do either way with whatever funds we can; but the new funds would greatly accelerate and bolster such an approach).
Finally, some seem to be criticizing the very idea that we plan ahead in case this issue passes. By doing so, we're "already spending the money," they say. Actually, the opposite is true. By creating a method of allocation that reflects our priorities prior to it passing, we can lock in a disciplined and strategic spending method and process, and apply it when the time comes. If we do nothing, and then it passes, that's when the feeding frenzy begins, and undisciplined, nonstrategic spending sprees occur.
In this case, planning ahead and thinking strategically will ensure that any new dollars are invested most effectively. Failing to do so will result in the same old status quo.
Monday, August 25, 2008
No Increase in Dog License Fee
Today, after a public hearing and much public input, (and despite a little confusion in the online story), the County Commission decided NOT to increase the dog license fee, but to instead explore other ways to get people to follow the law and register their dog.
Here are the basics of this issue:
- citizens are required by law to license their dogs
- the current fee is $13 per dog; this is a little less, but not by much, most of our surrounding and peer counties
- these dollars pay for dog warden activities that benefit both dog owners and the broader community
- fewer than 50,000 people have dog licenses, which we estimate is well less than 50% of total dog owners; some areas of the County comply at a rate of less than 15%
- mandated dog warden activities cost about $700,000 more than we receive through the license fees, so our general fund must make up that difference
- the proposal was to raise the dog license fee to $26 to try to cover that difference
After hearing input, and considering the issue, it came down to a simple business decision: we can make up the difference by doubling the rate on those who already pay for the dog license, or we can make up the difference by doing everything we can to get everyone else to obtain the dog license they are required to have.
We chose the latter. But in doing so, we proposed that the County and SPCA become far more proactive and creative in persuading people to do the right things and license their dogs, and explore: conducting promotions in partnership with private sector businesses in the pet "industry," and with dog-related events and locations; more public education overall; increasing the fines for NOT registering as required; targeted work in areas (such as the City of Cincinnati) that we know have the highest rate of noncompliance; and using the internet to promote and process licenses as easily as possible. Basically, promotion and enforcement.
The proposal to raise the price might in the short-run lead to an increase in revenue, but it might at the same time cause others to stop complying altogether. And those who haven't paid until now will be even less likely to do so in the future. Either way, it punishes those that are following the rules, in order to make up for those that are not.
We will produce a formal plan on our alternative approach in the coming months, but I am confident that with the right plan, we can greatly narrow the gap on folks who are not registering their dogs as they should. And this should also greatly reduce the amount of dollars we pay for dog warden services from the general fund.
Citizens ask us all the time to run government like a business--and today we did exactly that. As we do so, I welcome any other suggestions on how to improve the numbers on dog licenses?
Saturday, August 23, 2008
To Be Or Not To Be (A Farm) . . . That is the Thousand $ Question
My conclusion: this cloudy issue definitely requires regular and proactive oversight and enforcement, but I'm confident that this oversight is being provided by the Hamilton County Auditor's Office.
The basic law: in Ohio, like most other states, property owners can have their properties assessed at a far lower rate if that property meets the standard to qualify for what is called the CAUV Program. The CAUV stands for the Current Agricultural Use Value of the property, which is generally going to be a lower assessed value than the full market value of the property. For a large property, the distinction can lead to tax savings in the tens or even hundreds of thousands of dollars. For smaller properties, it can mean hundreds or thousands of dollars in savings.
O.R.C. 5713.30 lays out the guidelines of how one qualifies for the CAUV. Essentially, the parcel of property must be devoted "exclusively to agricultural use," and that use must be commercial (ie. not a pet horse). Types of qualifying uses can include: animal or poultry husbandry, aquaculture, apiculture, the production for a commercial use of field crops, tobacco, fruits, vegetables, nursery stock, ornamental trees, sod, or flowers, and commercial timber. There is also a woodland provision, where a property with noncommercial timber that abuts a CAUV property also gets the lower tax rate. For all the details on these rules, and other of the fine details (and there are many), you can go to:
http://ohioline.osu.edu/cd-fact/1267.html
http://www.hamiltoncountyauditor.org/tax_cauv.asp
CAUV in Hamilton County: Hamilton County has about 28,000 acres that have CAUV status--more than 1,200 parcels of property. Collectively, the CAUV status of this property eliminates about $100 million in tax value from that land. Not suprisingly, most of the properties are situated on the more rural West Side of the County (Colerain, Crosby, Whitewater and Harrison Townships). But the area with the greatest amount of property value under CAUV status is Indian Hill.
The issue: It's quite clear that there's a huge incentive to claim CAUV status from a tax savings perspective. For an owner of a large property, in fact, spending some dollars to have your property meet the minimum legal standards of commercial agriculture can be worth far more than the investment because of the tax benefit. Because of this incentive, if not monitored or enforced proactively and intensively, this CAUV program could become a heck of a loophole around paying full value, particularly for large properties. This is especially important to watch closely in a county like our's, where farmland is disappearing and being converted into residential property.
My inquiry: My office took a close look at the process, and had a detailed discussion with the Auditor's staff, who oversee this complex and complicated law. We also took a close look at a sample of properties that benefit most from the CAUV status.
After doing so, I am confident that the Auditor's staff is getting the job done. In addition to reviewing the required annual applications for CAUV status/renewal (and rejecting those that do not qualify), the office conducts at least annual site visits to ensure the properties serve the agricultural/commercial purpose their owners claim they do. (If a property owner benefitting from CAUV is found by an inspection NOT to be in compliance, that owner must pay the full value of the property going back three years.) Positively, they have made the process even more proactive/intensive over the past year. And if there is a sale or subdevelopment of a property, they will also watch closely to ensure that the property remains CAUV-eligible.
Of the sample of properties my office looked at directly, the vast majority indeed appeared to be working farms or at least undertaking active agricultural activity of some sort (although we could only see them from the street). A few did seem to be dormant/fallow, or non-operating. But there is a provision that allows these properties to be fallow temporarily (one year), as long as there use remains consistent with the agricultural use (as opposed to being developed for a different purpose). I pointed a few of these out to the staff to look at more closely.
The bottom line is that this is definitely an area to watch closely and regularly to avoid any temptation to turn this law into a property tax loophole and windfall. But it's also the case that the standards to achieve this CAUV benefit are not that difficult to achieve (which is an issue of state law).
But as there should be, there's a process in place at the County that looks to be getting the job done in sorting out who really should qualify, and who should not--and it's gotten more robust over the past year.
I'll continue to keep a watchful eye on this issue. And as the Auditor offered to me, if there are ever any properties people have questions about, please forward them along to me.
Thursday, August 21, 2008
Marketing and Tourism: An Investment That Is Paying Off
A majority of us believed it made sense to take excess dollars from the hotel occupancy tax (above what was needed to pay off the Convention Center debt payments) and reinvest those funds to market our region to the broader Midwest and nation. (Under state law, these dollars can not be spent on general county or city operations, by the way).
We did this, in part, because surveys of conventioneers had found that they had little to no understanding of Cincinnati, Hamilton County, or what our region had to offer. Compared to our peer cities, we simply weren't on the map, and had no "brand" to speak of. And without visitors, tourists and conventioneers spending money in our city, we were squandering one of our most important potential sources of economic growth. So we took some dollars and invested them in a well-targeted marketing strategy to tell our story near and far, and get people from all over to visit us.
Others disagreed with our investment, attacking this entire approach under the rhetoric of a "pet project."
Well, the results are starting to come in (measured in terms of revenues from hotel nights), and despite a tough economy, those results show that our strategy is bearing fruit.
The second quarter of 2008 generated $3.184M in revenues from the hotel/motel tax, the highest second quarter we've ever had. It is 35% higher revenue than what was generated just four years ago!
And despite the fact that the third quarter of each year is always the best revenue-generator for any year, the 2008 second quarter was the second best quarter we've ever had (only the third quarter of 2007 was higher, at $3.194M). Again, this is all at a time that travel costs have been so much higher in the air or on the road, yet people are still coming.
And all this good news does not even include the NAACP Convention that was such a success this summer, which will be recorded in our third quarter numbers this year.
Thanks to all those great organizations around the County, working hard to tell our story far and wide, for driving this critical source of economic growth. And remember, for every hotel stay, we have visitors touring our many wonderful sites and institutions, patronizing our restaurants and stores, and putting money into our sales tax coffers every step of the way.
Long-term, it is strategic growth investments like these--investments that let us compete with our peer regions--that will drive long-term growth and success.
Wednesday, August 20, 2008
A Sad Day for Ohio
I had the privilege and pleasure of meeting her a number of times, largely because we both were active supporters of the Hillary Clinton campaign. And I loved watching her on cable television, where she did so many interviews over the past year in that role.
She was an historic figure in Ohio. But that history aside, it was her sheer force of personality that I always found so striking. Whether in person, or on TV, she was spirited, direct, tough and so full of energy--positive energy. No matter how intense or heated the moment, she always was enthusiastic, beaming an enormous smile as she delivered one verbal roundhouse after the next. Which made her all the more formidable.
All of Ohio lost a great leader with her far too premature passing today.
Tuesday, August 19, 2008
Manufacturing Controversy: When Politics, Politicians and the Media Mix
The Facts
- last week, the County Commission approved expanding the power of the port authority--which the city had done a few weeks before. Prior to the change, the Port Authority had jurisdiction over the riverfront and brownfields in the City and County; now, it has jurisdiction throughout the City and County.
- prior to the change, and since 2000, the Port already had the power of eminent domain in all of its work; the one limitation on that power involved properties the County or City owned or leased, where the Port had to seek and receive approval from the County or City before exercising that power. If 60 days passed after it requested that power, and the request was not rejected, then it was deemed approved. (For all other property -- ie. NOT owned or leaded by City or County, no request for approval was necessary at all). This rule had been in place for years, and was approved by the City Council in 2000 (prior to my arrival, by the way), although I don't believe it was ever exercised.
- Last week, when we amended the port's power, while we generally maintained its previous power of eminent domain, we took the restiction that it must seek City/County approval (that previously applied only to City/County owned land) and applied it to ALL instances where it sought eminent domain anywhere in the County or City. The bottom line was that now, any attempt to use eminent domain would require approval of the elected bodies.
- Finally, we also, for the first time, changed County policy to require transparency and accountability that never before existed in the process. For the first time, notice and a public hearing now have to take place, and the Commissioners must hold a public vote, on any request for eminent domain by the County. Unlike before, if there is no vote within 55 days, the request is REJECTED by the County. So eminent domain can only occur with the approval of elected officials. The City is considering the same more restrictive policy, and I have already approached the City in order to amend the overall agreement to reflect this change.
Simple summary of the facts: eminent domain power is actually more constrained, and requires far more transparency and accountability, under the new agreement. Unlike the prior agreement, approval must be sought for any use within the County or City. And unlike before, the County requires a vote by its elected officials in all instances--and lack of a vote will lead to denial of the request.
THE NEW MYTH
Even though he had approved the 2000 Agreement that put into place the more liberal eminent domain approach, and had lived under it for eight years without concern, Commissioner DeWine saw this new agreement, which constrained the eminent domain power he had previously approved, as an opportunity to voice his opposition to eminent domain, a hot button issue.
- the first story appeared here, where it was explained (inaccurately) that the County was somehow changing/expanding the Port's eminent domain power: http://news.cincinnati.com/apps/pbcs.dll/article?AID=/AB/20080812/NEWS01/808120350/. Commissioner DeWine described the possibility of a "little old lady" having her house taken without a vote by elected officials, and puts out the message that the Port is being given a new eminent domain power it did not have before.
- even after we approved a new policy REQUIRING a vote by elected officials for any request for eminent domain, this opposition continued. http://news.cincinnati.com/apps/pbcs.dll/article?AID=/20080814/BIZ01/808140385/1076/BIZ. In this story, the disagreement is described in a pretty balanced way.
- other media outlets pick up on the rhetoric that a new eminent domain power was being added, and repeat the inaccuracy that the new agreement gave eminent domain power to the port, as if it was a power it had not previously possessed: http://cincinnati.bizjournals.com/cincinnati/stories/2008/08/11/daily34.html
- and a new item in CityBeat suggests the same, that we voted to give the Port Authority a new power--including "the ability to force the sale of property from unwilling owners using eminent domain". http://blogs.citybeat.com/porkopolis/2008/08/dj-vu-at-the-po.html (although at the bottom it explains a more nuanced view)
- not suprisingly, one reader of the Enquirer has read all of this, and wrote a letter expressing anger that myself and Todd Portune somehow have taken a step that introduced some new eminent domain power (worried that now the "average Joe" will lose his house), as opposed to the reality that we had tightened them. http://news.cincinnati.com/apps/pbcs.dll/section?Category=edit0202&plckController=Blog&plckScript=blogScript&plckElementId=blogDest&plckBlogPage=BlogViewPost&plckPostId=Blog%3ae8ab9c9c-3e4b-46b9-a08d-a17c4ecdcdc7Post%3aa35ac2cd-d6a9-46be-a096-123516070cf1&sid=sitelife.cincinnati.com. While he's wrong about what happened, it's hard to blame this citizen for not being clear on the facts.
And for months to come and beyond, I can guarantee you that other citizens also will express their passionate disapproval for last week's vote, even though, ironically, it took things in the very direction they support.
Just one case study in the topsy turvy world of politics, politicians and the media. And people wonder why the public view of all three is so low these days.
