Warren is in the lead, not that it wants to be

Warren is in the lead, not that it wants to be

The city of Warren could play the role of the canary in the mine shaft,

Due to a variety of factors — including the city’s past reliance for tax revenue on General Motors jobs, going back to the heyday of the Packard Electric Division — Warren could be the city that will show how quickly the air becomes poisoned during an economic downturn.

How Warren reacts could become a model for other area cities on how to — or how not to — address these problems.

The revenue stream

In recent years the city saw a spike in tax collections attributed to Delphi Packard Electric and then a sharp decline. In 2005, Packard receipts were $1.3 million. They jumped to $2.3 million the following year, when employees took buyouts. They they dropped to $729,000 in 2007 and are estimated at just $180,000 this year. Meanwhile, strikes and other plant closings have cost the city hundreds of thousands of dollars in anticipated revenues and there is bound to be some effect from the 1,100 layoffs announced by General Motors at Lordstown last week.

Mayor Michael J. O’Brien estimates that the city will have $3 million less to spend in 2009 than it had in 2008.

Obviously, the only way that a government entity can trim large amounts from its budget is through cutting personnel costs.

And that’s the challenge that will face the city. Some are saying that police and fire departments should be off limits because voters approved an income tax last year for police and fire protection.

It is unlikely that the amount of money that must be trimmed from the budget can be found without impacting the two largest departments in the city.

Sharing the burden

Perhaps what Warren’s administrators and employees should be talking about is if the budget can be balanced by sharing the burden.

At a time when hundreds of city residents are losing their jobs, it is not unreasonable to ask city employees to make concessions that affect all employees — or face layoffs that will have a larger adverse effect on some employees.

The public payroll should be subject to the economic forces that impact the private workforce. When companies are losing money, they freeze or cut payroll, they reduce fringe benefits, they put a lid on overtime, they eliminate jobs. That’s what’s going to have to happen in cities during a worsening economy, and Warren is going to be among the first — but by no means the last — to have to make tough decisions.