Toledo, Ohio to impose further cuts on employees

By Charles Bogle
6 April 2010

In northwest Ohio, an area already enduring harsh economic and social conditions, the stage is being set for even greater levels of hardship.

Between December 2009 and January 2010 the official jobless rate in Toledo shot up almost 1.5 percent (from 12.9 percent to 14.3 percent), the highest rate since 1983. In February, the jobless rate in Ottawa County, located just south of Toledo proper, stood at an astonishing 19 percent, down from January’s 19.8 percent. These figures speak to the devastation of the area’s manufacturing and specifically auto-related industrial base.

George Zeller, an economic research analyst in Ohio, argues that, “if you look at just the blue-collar job loss [in northwest Ohio], it is as bad as the Great Depression” (The Blade, March 11, 2010).

The increase in unemployment is largely responsible for the accelerating rate of personal bankruptcy filings: in March, there were 1,063 such filings in the 21 counties that comprise northwest Ohio, a 16 percent increase over the same month a year ago and the largest one-month increase since October 2005, when new laws made personal filings more difficult.

Real estate information firm CoreLogic estimates that as of late 2009, 33 percent of homeowners in Toledo (a city of some 300,000 people) either owed more on their mortgages than their houses were worth or had homes whose values were within 5 percent of being in “negative equity.”

In a study of selected US cities conducted by the National Association of Realtors, median prices of previously owned single-family homes in Toledo ranked fourth lowest, behind only Saginaw, Michigan, Youngstown, Ohio, and Lansing, Michigan. The median price of such homes has fallen 27 percent in Toledo since the peak in 2004.

All in all, the social distress that has long blighted inner-city Toledo is extending ever more widely. Approximately one in four city residents was already living in poverty in 2008, before the current recession took hold.

Far from attempting to ameliorate the suffering, the City of Toledo is using these deteriorating conditions as an excuse to make further cuts in the living standards of its public employees. Invoking “exigent circumstances,” i.e., the right to unilaterally change the terms of a binding contract in the event of unforeseen circumstances, the Toledo City Council has voted to mandate that the employees of five public employee unions pay 10 percent of their pension contribution and unspecified contributions to their health care costs.

In addition, the Toledo Board of Education has approved a two-tier system of cuts in education in an effort to mitigate a projected $30 million projected budget deficit. The passage of an 0.75 percent income tax levy in May would cover $18.1 million of the budget deficit, leaving the remaining savings to come through layoffs, cuts in school programs, and wage concessions. If the levy doesn’t pass, more cuts will be necessary, as well as increasing class size, eliminating low participation sports programs, and doing away with school crossing guards.

The local media have trumpeted the argument that if an income tax increase will still result in layoffs and cuts in school programs, there’s little point in passing the levy, practically guaranteeing the enactment of the second tier of cuts.

For the moment, the Council’s mandate to the five unions is in limbo while the Ohio State Employment Relations Board (SERB) determines the exact meaning of “exigent circumstances.” Joseph Slater, a professor of law specializing in employment law at the University of Toledo, claims that the City of Toledo would likely use the possibility of a declaration of exigent circumstance as a means of forcing the employees to accept their present demands with the threat that if they don’t, “We’ll give you cuts of a greater percent” (The Blade, April 3, 2010).

Official reactions to these announcements have been tepid at best. Francine Lawrence, president of the Toledo Federation of Teachers, has publicly admitted to having agreed to wage cuts and teacher layoffs, only to have her concessions deemed insufficient during a closed session of the Board of Education.

The Toledo Police Patrolman’s Association requested a temporary restraining order against the Council’s decision, but it was denied by the Lucas County Common Pleas Court on the grounds that the request amounted to an allegation of an unfair labor practice and therefore could only be decided by SERB.

The other five unions have publicly stated that they want their contracts honored and have also threatened to take the matter before SERB, but no substantive actions have been taken or proposed, and there is no reason to believe they will take any.

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