Let’s address the over 8 million dollar deficit bomb…
I think it’s time to take a look at the warning signs that were ignored, back on December 1, 2008 Governor Strickland had an hour long press conference where it was made clear that Ohio was facing historic economic issues and that even the worst case scenario estimates done by the Department of Budget Management in Ohio were going to be wrong, that it was going to be worse.
That should have been a wake up call to all local governments that if the State was having to revise their numbers? That the local government numbers could be off as well. That however did not happen, and with all of the financial expertise that is stated to exist both employed by the City and on City Council, a budget was passed on January 6, 2009 with it not being made public that there was an additional 8.1 million dollar deficit until January 29, 2009.
If you watch the City Council meeting which took place on January 6, 2009 the only real questions raised regarding the budget costs was related to the possible costs of the union contracts since those were “estimated” costs.
Warning signs were there, the problem is that no one in a position of authority seems to have publicly asked or answered the questions that given what the whole state of Ohio was facing, Toledo’s own estimations should be in doubt. Should it have been that large of a surprise is something that could be debated, should anyone have had the belief that if the State of Ohio’s worst case scenario estimates were not going to be accurate that it was going to be worse, that somehow Toledo’s were accurate?
It’s easy to look at things in hindsight, but the reality is in this scenario there were signs that were ignored and had there not been a rush to pass the budget, many things could have been done differently.
This appears to me to be a shared responsibility.
My first action during this time period would have been to look at the underlying economic assumptions and ask how I think they have changed. Based upon what was occurring, it was obvious that these assumptions were incorrect. A re-forecast might not have not have shown the same severity, but it would have pointed out that a budget hole was going to occur.
I don’t think anyone would have predicted what would happen and its swiftness. The mayor and his budget director share the blame for not re-forecasting and sharing their concerns (if the did re-forecast, then they have to be faulted on communications). The council should have asked the question.
The additional $8 million is probably more than they could have predicted given how swiftly the financial markets melted down and the resulting impact on main street. Still it was obvious that problems were on the horizon based upon what others were saying and doing.
Both sides get an “F” in their failure to anticipate a bigger budget deficit and for communicating with each other and for asking the tough questions.
What have they learned from this situation? Or have they learned? Don’t start the blame game: fix it and don’t let it happen again!
February 4th, 2009 at 1:01 pm