Youngstown’s fiscal mess even worse than expected

In February, we predicted that Youngstown Mayor Jamael Tito Brown would have no choice but to slash city government’s payroll because the operating budget is built on quicksand.

But the mayor, who took office in January, continued to cling to one of his main campaign slogans: “I don’t want to send anybody home.”

Brown’s good intentions – we believe he was sincere but na Øve – have now slammed against a brick wall that is the projected $16 million deficit in five years.

The fiscal mess that has been so evident for quite some time is even worse than anyone expected.

“If decisions are not made, the city could end up in fiscal emergency. You need to focus on the deficit as soon as possible.”

That ominous warning came from Michael Abouserhal, a certified public accountant hired by the mayor to assess the city’s financial condition.

Abouserhal retired last July as vice president of finance and business services at Cuyahoga Community College and previously worked as chief financial officer for Cleveland Public Power and assistant director of finance and controller for the city of Cleveland.

In other words, his assessment must be taken as gospel by the mayor and city council.

The keepers of the public treasury have no choice but to act on his recommendations for reducing the deficit.

There will be bitter pills to swallow, but the alternative is a state takeover of the city’s finances with the declaration of fiscal emergency by the state auditor.

Here are the most drastic recommendations from Abouserhal: employee layoffs and furloughs; elimination of raises; an increase in employees health- insurance premium contributions.

Abouserhal was paid $150 an hour up to $25,000 for the assignment that ended April 30. The office of Ohio Auditor David Yost recommended him to the mayor.

Outsider’s perspective

As we said in the editorial in February, “Having an outsider’s perspective of the finances is what the new mayor needs as he goes about eliminating the projected deficit in the forthcoming budget.”

The outsider has provided a bleak but realistic assessment of government’s fiscal future.

Residents of the city, many of whom are on fixed incomes and have had to tighten their belts during the Great Recession of 2008, will not look kindly upon Brown and members of council shirking their responsibilities.

Cuts in spending cannot be avoided, and since most of the general fund is absorbed by employee wages and benefits, the payroll must be a primary target.

We understand the reluctance of the mayor when it comes to sending employees home, but unless he can find millions of dollars in additional revenue, he has no choice but to bite the bullet.

For their part, the unions must agree to concessions if they hope to avoid wholesale layoffs. Pay increases for 2019 and 2020 of 1 percent and 1.5 percent are no longer sustainable, while the 10 percent employee contribution to health insurance premiums is unrealistic in today’s world.

Abouserhal, the financial consultant, recommends a 20 percent contribution.

In addition, he has proposed eliminating the pension pick-up for new employees and reducing it for existing workers.

There are other seemingly extreme measures in his analysis, such as the sale or closure of the city-owned Henry Stambaugh Golf Course and the elimination of 20 jobs in the fire department and 30 jobs in the clerk of courts/municipal courts.

There is precedence for taking drastic action to eliminate a budget deficit.

Former Mayor Patrick J. Ungaro slashed 200 jobs when the city was in the midst of record unemployment of more than 25 percent.

The key to dealing with the fiscal crisis is to ensure that everyone in city government sacrifices.

As we have pointed out in this space on several occasions, although Youngstown has one of the highest municipal income tax rates in the state – 2.75 percent – a goodly number of city residents do not pay it because they are on fixed incomes.

Indeed, the median income of a family of four in Youngstown is $24,000.

Short of a state declaration of fiscal emergency, the only way to deal with the projected $16 million budget deficit is to slash spending and increase revenue.

And here’s a final thought: As he ponders his next moves, Mayor Brown may want to think about the message it sends to the residents of Youngstown as he drives around in his brand new SUV paid for with public dollars.

He should get rid of it.