9/10/07

Excessive gov't hiring helps unions, harms economy

Warren and Youngstown residents working in manufacturing have seen the number of their jobs decline by nearly 29 percent since 1990, but during that time, the number of people holding government jobs in this area has increased by more than 12 percent, labor statistics show.

With the help of strong growth in the service sector, or jobs generally found in restaurants or retail establishments, overall employment in private companies saw a decline by only about a thousand jobs, or about a half percent. Still, government grew by about 3,500 jobs.

The imbalance in rate of job growth is cause for concern, according to Reid Dulberger, vice president of the Youngstown-Warren Regional Chamber, one of the agencies that works to bring new private business and jobs to the Mahoning Valley.

"More money spent on local government means less money available to grow the economy and less disposable income for people to spend at existing businesses," Dulberger said last week, adding that he believes the large number of local government jobs is keeping the economy stagnant.

While jobs are jobs — whether private or public — Dulberger said he thinks the only way to grow the local economy is to bring money in from outside the Trumbull-Mahoning market.

"If the public jobs are primarily federal such as the Youngstown Air Reserve Station, post office or federal courts, it would have the same effect as a private industry selling its goods or services outside the Valley," he said.

But most of the government jobs in the Youngstown-Warren area are local — 23,500 of about 32,500 — meaning they are supported by local tax dollars, and points out when local residents spend money on local government services such as police, fire, roads and education, that leaves them less disposable income to spend on retail and other activities that boost the local economy.

That opinion may not be a popular one among the government officials and workers in nine Trumbull County communities that are asking voters this November to raise their taxes.

In Bloomfield, for example, trustees are seeking to combine three fire levies into two with an increase of less than a half-mill. Trustee Roger Peterson Jr. said the Fire Department’s budget is $33,000 annually and $22,000 is paid to Bristol for ambulance service.

"That leaves us with $11,000 for gas, equipment, repairs. Show me a fire department that can operate on $11,000 a year," Peterson said.

He said the $60,000 generated by the replacement levies would be used to replace its aging fleet, put a new roof on the fire station and purchase new gear.

Peterson said the general fund is supported by a 0.7-mill levy passed in 1953 and the township would like to replace it next year so it can collect on current property values. He said the only paid township employees are one full-time and one part-time road worker.

"And we can’t even afford to give them benefits," he said.

Peterson said the township’s finances are further strained by the fact that one-third of its land is owned by the state in the form of wetlands, waterways and wildlife preserves. He said since that land is not taxable and there is no industry in the township, Bloomfield has no way to generate more funds.

In northeastern Trumbull’s Vernon Township, Trustee Walter Emrick said a 0.5-mill police levy is being sought to free up money in the general fund. He said the township has contracted with Hartford for police protection for the past three years and the most Vernon officials have been able to come up with is $10,000.

Emrick said the township would continue to supplement the police contract from the general fund, but the $8,800 generated by the levy could be used for other services. He said the township’s general fund budget is $100,000, which pays for roads, snow removal, the volunteer fire department and ambulance service.

"Small government funds all have been cut. We’re doing the best we can, but we need a little more," he said.

But Thomas Finnerty, associate director for the Center of Urban and Regional Studies at Youngstown State University, who studies development, believes one way to beat rising costs and government size is consolidation.

Finnerty said there is no doubt the Mahoning Valley needs more private sector jobs.

"The public sector jobs stick out more as private sector jobs decline. Consolidation is the answer, but this area is not in favor of consolidating. Yes, we need safety forces. But do we need 100 police chiefs and 100 fire chiefs in the tri-county area? Probably not," he said.

Finnerty said an aging population also is contributing to the stagnant nature of the local economy.

"We have a lot of senior citizens in this area who are on a fixed income. They are unable to pay more taxes, so they don’t vote for most of the levies. When the levies do pass, seniors take the biggest hit. And because they don’t have as much disposable income, they’re not spending their money on goods and services. They’re spending it on utilities and medicine," he said.

Finnerty thinks higher education is the key, but keeping college graduates here is vital to growing the economy.

In addition to federal jobs, Dulberger said jobs funded by the state such as the Ohio Department of Transportation, the Ohio State Highway Patrol, state-level courts and prisons also help grow the economy, while local government jobs simply recirculate money that is already flowing in the area.

"While that recirculation is important to stabilize the economy, it doesn’t help grow it and economic growth is what this area needs. If a person has $100 to spend, the majority of that will go to government services rather than consumer spending. And as the number of private sector employees declines because of manufacturing losses, there is a snowball effect," Dulberger said.

Finnerty agrees that there are too many local government jobs and not enough private sector employees to support them. However, he said the problem is a regional one that applies not only to the Youngstown-Warren area, but also to Akron, Cleveland and Canton.

"Obviously, we need government jobs, but things can be streamlined," Finnerty said.

He said public school employees are considered government workers, further adding to the number of local government employees.

On the flip side, workers at YSU, Kent State University and other state educational institutions bring money into the local economy. However, those employees are not enough to grow the economy when compared with the number of locally funded positions.

"That’s why levies are failing all over the place. There is not enough of a tax base to support all these public workers," Finnerty said.

In addition to Bloomfield and Vernon, voters in November also will see ballot issues for new or replacement levies in Bazetta, Brookfield, Fowler and Liberty, according to the Trumbull County Board of Elections.

In all, more than 30 taxes and other issues will appear on the November ballot countywide.

Finnerty noted, though, that all government employees — not just private sector employees — pay taxes.

"It’s a double-edged sword. These government workers shop here, spend money at our local restaurants and buy tickets to entertainment events just like the private sector does. It’s more a matter of that money recirculating, but if public employees stop spending their money, the economy would take a big hit," he said.

"Growing your own business is the trend and that’s what places like the Youngstown Business Incubator are for. Local startups will be the answer to increasing the number of private sector jobs because locally grown businesses tend to stay longer than big companies. Local businesses have an investment in this area, while big companies come here to take advantage of cheap labor," Finnerty said.

However, he cautioned against driving away big companies even if the jobs they provide are only temporary.

"A job is a job. We should take what we can get."

(tribune-chronicle.com)

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