In his State of the City address today at the Toledo Rotary (viewable here), Mayor Mike Bell said he wants to restructure the Capital Improvement Plan funds in order to borrow $28 million for street paving in 2012 and 2013.
The problem is that Toledo City Council has decimated the CIP fund over the past several years in order to cover general fund - or every day - expenses. This has left us with virtually nothing in the CIP to cover the necessary CIP expenses like road repair.
Council transferred funds because they just couldn't find anywhere to cut, despite funding things like Easter Egg hunts, hip hop concerts, arts projects and a host of other unnecessary (though desirable by some) items. In fact, tomorrow they will vote on transferring another million because revenue they expected from the new casino isn't yet coming in due to a delay in the casino opening.
Despite warnings that routinely relying upon the CIP to balance the general fund would lead to shortages in the long-term, council continued to do so.
Now we are faced with borrowing $28 million to cover our necessary expenses because there's nothing left. Interestingly, this will be the highest amount of debt issued since 1998 - more than twice the $13.5 million that was issued in 2003.
Toledo transferred out $7 million in 2011 to cover the 2010 budget deficit. They depleted their rainy day fun years ago. I believe the last time I added it up, it was around $50 million that had been taken out of the CIP and transferred into the general fund to cover every day expenses.
If council had just lived within its means and not transferred the money out of the CIP, we wouldn't have to borrow anything in 2012-13 to pay for road repaving.
But since Toledo voters approved letting council raid the CIP, there is no incentive for them to not do so. They spend the money knowing they can just raid the CIP to cover their pet projects and special programs, expecting to let future councils deal with the consequences.
Fortunately, the 3/4% payroll income tax will be on the ballot this year and Toledoans will have a chance to tell council "NO!"