Originally published in The Akron Beacon Journal
Monday, June 21, 1993
STARK SPENDS MORE THAN IT HAS
AFTER VOTERS REPEALED TAX, COMMISSIONERS BORROW $4 MILLION FOR DAILY OPERATIONS
BY DAVID KNOX
Stark County is falling back into a bad habit -- spending money it doesn't have.
Sometime next month, county commissioners will pour $4 million borrowed on short-term notes into the general fund to finance day-to-day, operations through the end of the year.
The commissioners say there's no other way to balance the books after voters stripped away $12 million in expected revenue by repealing the county's 0.5 percent piggyback sales tax by nearly a 2-to-1 ratio in November.
Despite the loss, the three commissioners, Mary M. Cirelli and newly elected Gayle A. Jackson and Donald R. Watkins, went into 1993 confident.
They had a plan. They were sure they could persuade voters not only to restore the sales tax, but to increase it to a full 1 percent by the end of the year. In the meantime, current spending would be maintained by borrowing to make up the shortfall.
The decision to borrow now in hopes of avoiding cuts later has begun to look like a bad gamble. What if voters interpret the lack of urgency in trimming spending to mean the county doesn't really need more money?
A growing number of public officials fear that's what has happened.
In passing an initial appropriation of $35 million in February -- every dime the county auditorcertified as available -- the commissioners argued they had already cut the budget to the bone by stripping nearly $1 out of every $5 requested by department heads.
"When you take a budget of $50 million and you cut it to $40 million and you still don't have enough money, you have to take the painful step of borrowing," Jackson said.
A closer look at the county's books reveals appropriations are up compared to 1992 for every department headed by an elected official, comprising the sheriff, courts, prosecutor, auditor, treasurer, coroner, recorder and the engineer. While the increases vary widely, they averaged more than 8 percent.
A few offices did see cuts: the Planning Commission, Board of Elections and Veterans Services. But those reductions were more than offset by the increases.
While total spending will be slightly less than in 1992, the reduction comes entirely from accounts not involved in daily government -- building improvements and debt repayment funds.
The commissioners weren't lying about the cuts. They were adopting the jargon of Washington, where officials routinely talk of cutting federal spending when what they really mean is reducing the rate of spending increases.
That's precisely what infuriates Arthur F. Hallam of North Canton.
"When the Washington people use that language, they want us to believe that they actually are reducing the spending," he said. "It's not right.
"If they are going to cut spending, there should be fewer dollars spent."
Hallam, 69, a retired computer programmer for the Akron rubber industry, has joined the Committee For the Right to Vote, the group that circulated the petitions to repeal the sales tax. Earlier this year, he was one of 137 circulators who garnered more than 22,000 signatures on a petition to force a vote in November to repeal a $10 increase in license plate fees approved by the commissioners in March.
If the commissioners were slow to understand people like Hallam, it's understandable. For most county officials, the need for the sales tax hardly needs proving. After all, Stark is the only one of Ohio's 88 counties without one.
If further evidence were needed, they point to the $20 million in debt the county amassed during the 1980s, when voters three times rejected a sales tax.
Last year the county eliminated about a quarter of the debt -- thanks to the sales tax imposed in 1991. The commissioners temporarily set it at 1 percent until last July to generate surplus cash.
Income nearly cut in half
The loss of the sales tax makes government impossible, officials argue. It's as if a family that earned $46,000 in 1992 suddenly saw its income slashed nearly in half. Add three zeroes to the family's income figure -- transforming the thousands into millions -- and the result would be a good approximation of Stark County's plight.
Without the sales tax, the county can only count on about $26 million coming in annually. By the commissioners' figures, spending mandated by state law requires more than $30 million.
As in the case of a family with some money saved in the bank and a credit card, the sky didn't fall immediately.
The county had a $5.4 million carry-over and $4 million in sales tax receipts that were collected before the repeal but weren't received until 1993.
The leftover money added to the regular income meant the county was shy only about $5 million of what it spent last year.
But rather than cutting the budget by that amount, commissioners chose to borrow instead.
In doing so, they violated the spirit, but not the letter, of a state law prohibiting local governments from going into debt to pay for ordinary expenses.
The borrowed money won't go immediately into the general fund. It will be used to replace money set aside last year -- when the county was flush with sales tax cash -- to complete two large building projects -- the renovation of the courthouse and construction of a 96-bed jail addition. Counties can legally take on debt for such building projects, much the same way bank can mortgage homes but won't loan money to pay your electric bill.
Once the borrowed money is in the construction accounts, the commissioners can legally return $4 million of the replaced money to the general fund.
Politics played a role
The commissioners might have avoided borrowing by pressuring the other elected officials to cut deeper -- but that was ruled out for political reasons.
In last fall's election campaigns, Jackson and Watkins blamed incumbent commissioners Patricia Miller and Thomas Rice for fostering suspicion and distrust among county officials.
After promising to bring a spirit of cooperation, Jackson said it was natural to try to accommodate the other officials during the budget negotiations.
"We didn't want to cripple anyone," said Jackson. "I have to trust people. I truly believe there were no games played."
But there were games played -- only not the kind Jackson meant, according to county Auditor Janet Weir Creighton.
The commissioners just didn't know the rules.
Creighton said the initial budget requests traditionally are inflated as a bargaining chip in the negotiations.
"You put in what you hope to get and then more," she said. "All of us wish for things."
Because of the loss of the sales tax, Creighton said she expected the commissioners to ask that her department's spending be reduced by "10 or 12 percent" compared to 1992.
"I was surprised the cuts came from off the wish lists," she said. "Those aren't real cuts." Using a light squeeze
A measure of how lightly the commissioners squeezed the budget is revealed in the amount of travel spending -- usually one of the first items axed when cash gets tight. Total appropriations for travel for all departments increased by 64 percent, from $44,554 in 1992 to $73,150 this year.
As pessimism mounts about the chances of the sales tax passing in November, there are signs of cracks in the unity the commissioners boasted of at the start of the year.
Jackson, who has vowed never to impose a sales tax without a vote, remains optimistic of passing it. "Some people call me a Pollyanna." But she's rapidly becoming a minority of one on the board of commissioners.
Cirelli, who voted against hiking the license plate fee as a threat to the sales tax, now is even more blunt. "I really don't see that it will pass because it will be on the ballot with the license fee repeal."
Watkins said he still gives the tax "a better than 50-50 chance." But a better gauge of his grim mood was a question he asked earlier in the interview: "What do we have to do to convince the people that we are being honest and straightforward in saying we need the money?"
Watkins also is second-guessing the decision to borrow the money to maintain spending levels this year.
"Maybe what we should have done is calculate the date when there is only enough money left to pay unemployment for the employees and when we come to that point, just shut the county down."
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