Slow down on Q deal
Posted March 27, 2017 in Press Releases
With uncertainty in Washington and Columbus, local leaders should prioritize more pressing needs
Contact: Policy Matters Ohio
The Cuyahoga County Council likely will vote March 28 on whether to sell $140 million in bonds to finance an expansion and remake of Quicken Loans Arena, and the Cleveland City Council may decide on whether to commit $88 million to the deal by mid-April. But moving ahead now is premature.
The county has been making critical investments in early education, demolition of dilapidated housing, sustainability and a variety of human services. But many critical needs remain unmet. The staggering number of deaths from the drug epidemic constitutes a public health crisis. Poverty and blight afflict large sections of our region. We need more decent jobs for workers trying to get by in a community still short of the jobs it had in 2000. Recent developments in Columbus and Washington, D.C., underline the financial uncertainty for both the county and the city.
In his budget plan now being debated, Governor John Kasich has proposed eliminating the local sales tax on Medicaid managed care organizations, which will cost the county $23 million or more each year. This could cause a fiscal crisis at the Regional Transit Authority, which could lose $20 million a year. State tax revenue has continued to come in below expectations month after month, making the two-year state budget an exercise in uncertainty.
The Kasich administration also has proposed a further reduction in Local Government Fund aid to Cleveland and the takeover of municipal income tax collections of business profits, moves that caused Mayor Frank Jackson to send a letter of protest to state legislators.
Most recently, the Trump Administration proposed drastic cuts in a whole raft of programs that help localities and local residents. It would zero out the Community Development Block Grant program; just one current use of CDBG funds is $1.65 million in 2017 grants awaiting final approval for streets, sewer and sidewalk repair, community centers, enhancements under the Americans with Disabilities Act, playground improvements and storefront renovations. The Trump plan would eliminate support for energy assistance that allows families to keep the heat on in the winter and housing aid that benefits thousands of Cuyahoga County residents. County Executive Armond Budish noted that the cuts “would be devastating to the people of Northeast Ohio.” He said: "The proposed federal budget cuts to manufacturing, economic development, internships and summer employment, Job Corps and other workforce training programs would seriously harm the people who want to work in Northeast Ohio." While thankfully strong opposition to the Trump budget has already surfaced, there is the definite possibility that federal support for a host of programs will be cut back. Will local governments be in a position to pick up any of the slack?
The county is moving forward as it should to back the much-needed revamp of MetroHealth’s main campus. Far more than Quicken Loans Arena, this is a critical resource that county residents look to as their safety-net hospital. Friday’s defeat of efforts to end Medicaid as an entitlement is a help to Metro, whose resources would be strained by a major Medicaid cutback. However, significant uncertainty remains here, too, as the state and federal governments may add major new costs and requirements for Medicaid participants.
Rushing ahead with the Q deal amidst these uncertainties is irresponsible. At a minimum, county and city councils should wait until a state budget has been finalized in June, and more is known about the federal cutbacks that are under discussion.