Wednesday, July 24, 2013


UPDATED:  To clarify that Alliance income tax increase is subject to voter approval come the November election.




Today at 10:00 a.m. in Detroit, Michigan an event - beyond belief in 1950 as "the motor city:" the auto manufacturing behemoth of the world reached it high point in population growth - will go down.

That event:

Even though we have all known that Detroit was in trouble with General Motors and Chrysler needing federal bailouts in the financial crisis that hit the country in the fall of 2008, it still was nonetheless shocking to hear on July 18th that this once great American city had filed for bankruptcy under Chapter 9 of the federal bankruptcy code.

Yesterday, it was somewhat jarring for yours truly receive the following e-mail:
The Independent recently reported that the Massillon Auditor's office reported it would not be able to make a pension payment for its employees. Considering that Massillon is running a $2 million plus deficit, is Massillon on the verge of bankruptcy and is it Stark County's version of Detroit?
Actually, Massillon is projecting a deficit of anywhere from $2.5 to $2.7 million.

Of course, Massillon is not alone.

Stark's other two major cities are not in the greatest of shape either.

For Canton, it is hard to know exactly how tough things "really" are.  There you have a mayor who plays volleyball with the financial numbers with one side of the net being "woe is me" numbers and the other being "things are looking very promising" numbers.  Of course, we who are familiar with this Stern School of Business MBA graduate master manipulator are not surprised.  It seems that on a daily basis he concocts "a message of the day" to spread throughout the county depending on his political needs.

The mayor and his manipulations notwithstanding, the SCPR's sense of Canton's finances is that they are shaky at best.

For Alliance, on July 15th its city council voted unanimously to increase its income tax by a full 1/2 percent to 2.5% which by the SCPR calculation will make it the highest rate in all of Stark County if passed in November by the voters of Alliance.

The city is facing a $1 million deficit if the issue does not pass.

All three cities have long passed the high water marks of population growth.

It may appear that Massillon is rebounding somewhat but such is not really the case.  Former mayor Frank Cicchinelli was an aggressive annexer and therefore the seeming population recovery is just that in that its population gains of late are likely do from annexations of peripheral township neighborhoods.

Even before she took office, Mayor Kathy Catazaro-Perry was asking Ohio's auditor (December, 2011) to audit Massillon finances.  She was refused at the time, however she has renewed her request and it appears that any day now we will know the results of an agreed to audit as to whether or not Massillon is in a "fiscal watch" or "fiscal emergency" which will - if so determined - bring the state of Ohio into the management of Massillon's finances.

During a July 8 Massillon City Council work session there were two interesting discussions.

First, was one initiated by Democratic Councilman-at-Large Paul Manson asking that council consider putting on another income tax levy from 1.8% to 2.0% (Massillon hugely defeated a .3% issue in the May primary election) in light of Alliance (at the time) considering a ballot initiative going from 2% to 2.5% (see Alliance discussion above).

Second, was one between Republican Ward 5 Councilman Donnie Peters, Jr. (not seeking re-election) and Massillon auditor Jayne Ferrero regarding the decision by Ferrero to apply new revenues to arrears in police and fire pension fund payments.  She also brought up other arrearages that Massillon has.

The two of them are further substantiation of the e-mail cited by The Report and the fact of the precarious financial condition of Massillon city finances.

While neither Alliance, Canton or Massillon appear to be at the point of a Detroit-esque financial crisis, one gets the feeling that none of them may be that far away.

Dire finances are becoming more and more common across Ohio.

A Dayton area newspaper reported earlier this week that 24 Ohio cities are facing fiscal crises.

It might not be Alliance, Canton or Massillon but might it be that sooner than we may think that Ohioans will wake up to a headline:

Cleveland declares Chapter 9 bankruptcy!

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