The Perfect Storm: Why Our Budget Is So Tough

As we approach our 2009 budget deliberations, I thought I'd take a moment to explain why our County's budget situation is so challenging.

Unfortunately, it's pretty simple--and the graph above sums it up well.

Several primary revenue streams to our general fund are down--some in dramatic fashion--from last year.

1. Sales tax, our largest source of income, is down 1.5%. While that looks relatively small on the graph, that is our largest source of funds (about $65M), so any decline represents a significant amount of dollars (especially when it usually grows). Importantly, we don't collect sales tax on gas or food, so to the extent the cost of those items has been way up most of this year, overall spending on those items that we do tax will go down as squeezed families spend less on those items.

2. Interest income we count on has fallen by millions because of the decline in interest rates.

3. Most dramatically (percentage-wise), the dramatic decline in the housing market, property sales and property development have combined to take a huge chunk out of all revenues that rely on those industries--including the real estate transfer tax, associated fees, and building permits.

Together, these hits to our revenue total about $10M.

And they help explain why the key elements of the current economy--a housing slump that depresses property sales and prices, recent food and gas price increases that reduce spending on other items, a growing consumer spending slump, and the Fed's effort to battle all this with low interest rates--have combined to form a "perfect storm" for our basic revenues and budget.

Heading into 2009, while we have to budget assuming the worst (ie. that this continues), we'll also prioritize those measures that will help turn this economy (and our revenue picture) around.

The Economic Crisis: Your Take?

I'd love to hear your thoughts on the current economic crisis -- what you think caused it, how it has affected you, and what you think some of the solutions are.

Let me know by taking the survey: http://www.surveymonkey.com/s.aspx?sm=wpvBMulwtpboTxdjbFQUSw_3d_3d.

County Assists in Hugely Successful Riverbend Expansion

In 2007, we at the Hamilton County Commission voted to facilitate the financing of an exciting new feature at Riverbend, doing so through our conduit debt policy.

The result? In its first year, the new National City Pavilion propelled a more than 60% increase in attendance at River Bend, making the venue one of the top-attended outdoor entertainment sites in the world.

The size of the Pavilion, 4,100 seats, allows it to book a whole separate niche of events and entertainers, and this year that included Sheryl Crow, the Moody Blues and Bob Dylan.

For the Enquirer's account of this great success, go to: http://news.cincinnati.com/article/20081024/ENT03/810240372/1035/LIFE&referrer=NEWSFRONTCAROUSEL
For a direct look at the facility, go to: http://www.nationalcitypavilion.com/

Even in tough economic times, this is another example that there are still ways to propel growth.

Job Development 101: Land Them, Grow Them

Great story in the Enquirer today on the expansion of DunnhumbyUSA downtown.

http://news.cincinnati.com/article/20081022/BIZ01/310220032/1076/BIZ

This was a company whose initial entrance into Cincinnati I was proud to support when I was at City Council. While it was small at the time, the key was that it created a foundation to grow upon. The company's expansion and growth--more than 500 jobs over the next several years--is a great case study on how we can strategically build our job base.

Lessons learned:

1. Dunnhumby originally came here to be close to its largest client, Kroger. They also serve Procter & Gamble.

Lesson: To many companies and in certain industies, our greatest asset will be proximity to major Fortune 500 companies they serve or hope to serve. We have to use that to our advantage, and work with our Fortune 500 and other major companies to strategically leverage their presence as much as possible.

2. While Dunnhumby started small here (13 people), once they set up the outpost to serve Kroger, they have been growing since.

Lesson: The largest source of job growth comes from expanding the businesses that you already have. So once we've got someone to establish a presence here, we need to do everything we can to help them grow here--understanding their needs, being an easy place to do business, showing them that we appreciate their presence, and being responsive to their expansion needs as they grow.

Our Senior Services Levy--A Great Investment

Last week, just as I did last year, I paid a visit to one of the thousands of seniors served through our Senior Services levy. This is the levy approved, I believe, by a greater percentage of votes than any other--and for good reason.

It allows our senior citizens to get the basic in-home care and assistance they need to stay safe and independent in their homes, with their loved ones, rather than entering a nursing facility (which also comes at a far greater cost). Key programs include: Meals on Wheels, housekeeping, home safety upgrades, personal care, and community services such as adult day centers. Together, these programs provide a support network and cushion that can make all the difference in providing senior years of independence and dignity.



The picture above illustrates why this program works. A care manager with the Council on Aging and I visited the home of Hulda Gehring, who is 104 years old, who lives with her son Don, who is in his 80s, and his wife. While Don and his wife do most of the caring for Hulda, the several visits per week by the program's case worker, and the services she provides, free Don and his wife to tend to other chores, errands and demands on their time. It's a win-win; the family stays together, but the primary caregiver gets some much-needed assistance and relief.

In other cases, this same service allows long-time couples to stay together and live independently, providing similar relief for a caregiving spouse.

Hulda, by the way, still pays close attention to the news and politics of the day, listening to talk radio every day.

Health Care Controversy: Update

Here's a version of the email I sent out today explaining what became a very convoluted issue:

FINAL UPDATE

Today, the County Commission dealt with the issue of the Springdale Health Center (operated by Planned Parenthood) many citizens have emailed us about. As I wrote to many who emailed me, the issue was more complicated than it first appeared.

1. Today’s vote: As was explained in my prior blog entry, the health services (which did not involve abortion services) provided at the Springdale Center were agreed to by the Hamilton County Family and Children First Council, and performed, months ago. Today’s vote was simply to approve a “then and now” resolution, which is a technical affirmation that funds were available earlier this year at the time the non-abortion health services were provided at the Springdale Health Center. As explained in my prior blog entry, under the structure that’s been in place for years, the County Commissioners do not approve contracts or expenditures of the Hamilton County Family and Children First Council (largely because these are all state funds, not County funds). I as a County Commissioner don’t have control over the Council, and do not vote on their payments/contracts. But in this instance, the HCFCF staff made a technical processing error—specifically, they failed to obtain a purchase order for the services in question. Because of that error, the resolution before us simply affirmed that there were dollars available to pay for this service at the time, earlier this year, that the services were due. Voting “yes” to the resolution simply affirmed, as a matter of law, that such funds were available in the HCFCF account at that time—and indeed, there is no question, and the auditor affrimed in writing, that they were. (Voting no would be stating that those funds were not available—which would be knowingly voting for something that is legally and factually false!). Given the technical nature of the resolution, I did vote yes, and it passed.

2. Commissioner DeWine’s Resolution: Today, Commissioner DeWine introduced a resolution that, in the future, would amend the HCFCF policy/process so that we as a County Commission would actually vote on a contract by the HCFCF before it is executed. (The issue here was that the contract was agreed to and executed, and the technical error followed, leading us to vote on the “then and now” resolution after the fact). Commissioner DeWine’s proposal, which could lead to greater transparency about how state pass-through tax dollars are being spent, is something we all agreed to consider and study in light of the debate and many questions of the past week. But there might also be other consequences to this shift, which we also need to weigh and understand. The proposal will be reviewed by the HCFCF, as well as the County Commissioners, and we will make a decision on it at a future Commissioner meeting.

3. Big Picture: Overall, for years, the state has sent money directly to HCFCF to support health services to vulnerable women through numerous vendors. Because of prior commissioners’ concerns, the state has separately sent money directly to the Springdale Health Center/Planned Parenthood over the past ten years, and not through the County or HCFCF. Outside of the isolated payment/contract at issue today, it was explained to us today by the HCFCF executive director that that system separating payments (dollars flow through HCFCF to other vendors, but from the state directly to Springdale) will and must remain the approach in place, because the state communicated to the HCFCF that no changes could be made in the middle of the five-year grant with the state (which we are in the middle of).

PS – For more information on the HCFCF, go to http://www.hamiltoncountyohio.gov/hcfcfc/Child_Family_Health_Consortium.asp.

The Enquirer summarized the issue pretty well here: http://news.cincinnati.com/apps/pbcs.dll/article?AID=/AB/20081020/NEWS0108/310200046/

Getting the Facts Out: Controversy and Confusion over Health Clinic

Recently, an email and phone call firestorm has erupted over a rather technical resolution on the County Commission's agenda regarding health services provided to uninsured and under-insured women at a health center in Springdale (the center is operated by Planned Parenthood, but does not provide any abortion or abortion-related services).

The Enquirer blogged about this here: http://news.cincinnati.com/apps/pbcs.dll/section?Category=blog02&plckController=Blog&plckScript=blogScript&plckElementId=blogDest&plckBlogPage=BlogViewPost&plckPostId=Blog%3aec38bb2b-982e-46ba-819a-da01a547e8eaPost%3a93d976af-1513-4172-82bd-293084376438&sid=sitelife.cincinnati.com

Given the amount of interest that has erupted over this item (perhaps as many as 1,000 emails from across the country), I am providing a factual description of the item:

I hope this email provides clarity about what information I have garnered to date. (I apologize in advance for the length of this, but it turns out to be quite complicated.)

1. THESE ARE NOT HAMILTON COUNTY DOLLARS.

(Some emails were concerned about the impact of this expenditure on the County’s budget). These dollars are a direct pass-through from the State of Ohio that go through the Hamilton County Family & Children First Council (HCFCF)—they are not Hamilton County dollars (in other words, they have no impact on our budget, or our budget’s problems). These dollars have been spent for years from the State budget on these services at a number of facilities, including the Springdale location. Still, of course, these are taxpayer dollars, and you have every right to know what they are paying for.

(Note: the HCFCF was created by statute by the Ohio General Assembly, at the direction of Gov. George Voinovich. Although one commissioner sits on the board, it is independent from the Board of County Commissioners—its membership is mandated by state law. We do not approve or execute its contracts.)


2. THE DOLLARS INVOLVED HERE SUPPORT A STAND-ALONE HEALTH CENTER IN SPRINGDALE THAT PROVIDES IMPORTANT HEALTH SERVICES, BUT NOT ABORTION SERVICES.

This money goes to a stand-alone health clinic in Springdale—a health clinic that screens for health problems and provides health services, but which does not provide abortion services, and has no capability to provide such services. What are provided are critical services that screen and treat the health of low-income women, including:

o screens for cervical, breast and colorectal cancer
o screens for alcohol, tobacco or illicit drug use
o screens for intimate partner domestic violence
o information on healthy eating, exercise, and obesity prevention
o annual PAP test
o prescription and referral for a mammogram, and rectal examination, for women over 40
o counseling on STD testing, and administration of an STD test
o contraception counseling for those who request it
o Smoking cessation intervention
o This center does NOT provide abortions services.

3. BECAUSE IT INVOLVES A STAND-ALONE CLINIC, THIS FUNDING IS NOT RELATED TO AND DOES NOT IMPACT ABORTION SERVICES.

The dollars spent at this health center are not related, and have nothing to do with, abortion services. This is a stand-alone health center, and the dollars are not fungible. In other words, a reduction in these funds would mean one of two things: 1) it would simply reduce critical health services at this center, for women without adequate health care, or 2) the women it serves would have to pay a higher cost for these critical health services. Either way, the result would be that preventive health services would be reduced, leading to higher costs on the emergency end, and poorer community health.

The work provided and dollars spent in this health center have no impact on abortion services, which are paid for by those who choose that service (not public money) at a location across town. In fact, this is no different than the case of federal dollars. Under the Hyde Amendment, federal dollars CAN NOT be spent on abortion services. Still, federal dollars are spent on locations such as this that are wholly separate and provide health services. These funds must only go to those separate services, and there is very close auditing to ensure that everything is separate. Those same procedures to ensure complete independence and separation take place here.

4. THE RESOLUTION IS NOT A FUNDING RESOLUTION.

One other important fact: the resolution before the County Commission is not a discretionary item to fund a grant or a program, or enter into a contract. As explained above, the County Commissioners do not approve contracts or expenditures of the HCFCF. This was a payment made months ago by the Children and Family First Council, for (non-abortion related) health services provided months ago at the Springdale Center. I as a County Commissioner don’t have control over the Council, and do not vote on their payments/contracts.

But in this instance, the HCFCF staff made a technical processing error—specifically, they failed to obtain a purchase order for the services in question. Because of that error, the resolution before us simply affirms that there were dollars available to pay for this service at the time, earlier this year, that the services were due. Voting “yes” to the resolution simply affirms, as a matter of law, that such funds were available at that time—and indeed, there is no question, they were. (Voting "no" would be stating that those funds were not available—which would be knowingly voting for something that is legally and factually false!).

I realize people will still have strong and different opinions about where to go from here. At the very least, I hope this explains better just what the item before us is.