Cleveland City Council is adding $4.6 million for local projects to this year’s budget, over objections from Mayor Justin Bibb that the city should gird itself for potential federal cuts under President Donald Trump.
Though a relatively small amount of money compared to the $806 million General Fund, the expenditure took on outsized importance during meetings Monday at City Hall.
Council members argued that there were major needs in their neighborhoods for new streets, parks and security cameras. The Bibb administration contended the expense would throw the budget out of alignment at a moment of financial uncertainty.
The proposed source for the spending is $61 million that was left over from last year’s budget. The pool of unspent funds, known as the “carryover balance,” is at its highest level in recent memory, according to numbers compiled by council staff. Cleveland also has a $67 million rainy day fund and a $73 million reserve fund for meeting payroll.
“The fact that we’re fighting over $4.6 million that we believe needs to go toward direct neighborhood investment is absurd,” Council President Blaine Griffin told reporters on Monday.
Echoing Bibb’s campaign slogan, Griffin stressed the urgency of neighborhood needs.
“Ladies and gentlemen, Cleveland can’t wait,” he said at a noon meeting. “We can’t wait.”
The expense was a finer point – although a contentious one – in the Bibb administration’s final budget negotiations with City Council. Council wanted $10.2 million neighborhood projects, or $600,000 for each ward. Bibb agreed to $5.6 million of that.
The mayor said in a statement Monday evening that he wouldn’t support dipping into the carryover balance for more.
“Our carryover balance is meant to ensure that in cases of emergency, we have cash available to support our community, it is not intended to finance special projects,” he said. “This is dangerous and irresponsible, and at a time of grave uncertainty in federal funding, we cannot in good conscience support it.”
The mayor’s finance director said there are potential hazards awaiting the city this year: The federal government could cut Cleveland’s grants. A change in state law could increase the city’s payments for police pensions. Changes to the tax code could remove the tax exemption for municipal bonds.
“All of those are huge risks to the city financially,” Finance Director Paul Barrett told Signal Cleveland in an interview Monday.
The Bibb administration and council have already slated $31.6 million for roads, parks and recreation centers using American Rescue Plan Act dollars. But Griffin on Monday said that spending “only touches the surface” of Cleveland’s needs.
Bibb agrees to $15.2 million in council budget requests
In all, the administration agreed to $15.2 million in requests from council, including $8 million for street resurfacing.
Council also requested and received money for 13 new recreation center staff, 11 more EMS workers, an LGBTQ community liaison, a Spanish translator and an aide for small businesses.
Other items in the budget deal include:
- $500,000 for summer jobs through the YOU program
- $113,000 for neighborhood resources in schools
- $100,000 for auxiliary police
- $75,000 for carbon monoxide and smoke detectors
The city said it would pay for the street resurfacing by borrowing money, but the other items required trims to other items in the budget. The Bibb administration is proposing to cut $2.5 million in city payments for Justice Center maintenance, $2.2 million in IT projects and $350,000 in a neighborhood branding contract, for example.
Council asked the mayor to consider cutting spending on special assistants in Bibb’s office, Barrett said, but the administration did not agree to it.
Heated arguments over Cleveland’s budget balance
There was a see-saw quality to Monday’s meetings, as council members praised Bibb’s financial leaders for their professionalism while accusing them of being disingenuous.
The sticking point was a crucial piece of budgetary jargon: “structural balance.” A budget can be balanced but not structurally balanced if it relies on one-time revenue to pay the bills.
A structurally balanced budget is one that sustains itself with regular revenue such as income and property taxes. The Government Finance Officers Association recommends structurally balanced budgets “where recurring revenues are greater than or equal to recurring expenditures in the adopted budget.”
Barrett, the finance director, defined structural balance this way: There must be at least one dollar coming into the city for every dollar that goes out. He told Signal Cleveland that council’s additional $4.6 million would throw the 2025 budget out of structural balance by tapping last year’s leftover funds.
Ward 3 Council Member Kerry McCormack rejected the “structural imbalance” label in strong terms.
“That is a lie, let me just use that word,” McCormack told reporters. He then walked back the accusation. “Let me not say ‘lie,’” he said. “I don’t want to cast aspersions. It’s not true.” (He later apologized in a news release, saying he thought the finance director was “working in good faith.”)
The council member pressed the point during the finance committee hearing later in the day. He said that the $4.6 million was a one-time expense funded with one-time money – and therefore shouldn’t be counted against the budget’s structural balance.
When the public hears the term “structurally imbalanced,” McCormack said, “they think that council is living above its means in the daily operating budget of the City of Cleveland, and that is not true.”
City Controller Jim Gentile said that the $4.6 million was still an additional cost in the budget legislation, even if it was a one-time expense.
“I’m a certified public accountant through the State of Ohio,” he said, “so I cannot sit here and tell you you have a structurally balanced budget when you do not right now.”
