East Cleveland Fighting for Economic Health

Aired July 1, 2003

Cities across Ohio are in tough economic times, but the city of East Cleveland is in a worse place than most. For the last 15 years the city has been in a state of fiscal emergency. Last year, falling revenues left East Cleveland with a huge deficit. The city had to lay off firefighters and cut back essential services to balance the budget. This spring, the state took over the insolvent school system. But both city and state officials say East Cleveland is making progress climbing out of its black hole. Far from being ready to dissolve, the city is fighting its way back to economic health. But as ideastream's Karen Schaefer reports, East Cleveland still has a ways to go.

Talk to anyone in this mostly African-American community of 27,000 and you'll hear about the problems of East Cleveland.

Man in Laundromat: When I came here it was about 60/40 - 60 white, 40% black. As time goes on, white people moved out and the tax base moved out. And then the drugs came in. It's hopeless. It seems so futile.

For most on the outside and many who live here, the state of East Cleveland does not look good. What was once the home of John D. Rockefeller is now a place where the median household income is less than $21,000 a year. Property tax delinquency is above 50%. Even the mayor has failed to pay taxes on time. Schools Superintendent Elvin Jones says that's one reason why the district came under state control this year.

Elvin Jones: And I think the most devastating would be the fact that a property re-evaluation that occurs every four years in Cuyahoga County. And they assessed the property values at a higher level, which in turn caused the state to give us less money. And then we were unable to collect the taxes at a local level.

The school district is currently about $6 million in the red. But even as the system struggles with cutbacks, it's building new schools with the help of $90 million in state funds. That's just one example of the paradox of East Cleveland. Nigerian-born Mayor Emmanuel Onunwor says you only have to drive down Euclid Avenue to see improvements in his city.

Emmanuel Onunwor: This project is costing $6.7 million to do all this. The hospital has spent almost $6.1 million in expansion. The new daycare here across the street that caters for our children, so wonderful - over $3.1 million. We have GE that is here and people thought that GE would move and go away. No, they are going to stay and they are staying here. They have over 600 employees on that site.

The city's assets - GE's Nela Park, Huron Hospital, and some of the most elegant residential housing in the county - are keeping East Cleveland in the black for now. Joe Gray heads the state's Fiscal Oversight Commission, which has been working with the city since 1988. This month the commission ordered 15% cuts to the city budget unless it can produce a 5-year plan to end the fiscal emergency. That plan has been approved by the council and is now in the hands of state auditors. Gray says the plan does contain some essential elements.

Joe Gray: As part of the financial plan that we're currently working on, there's some fee increases for enterprise funds, there's the safety levy that we talked about, trying to get that on the ballot in May of 2004.

But Mayor Onunwor is fearful voters may not approve more taxes.

Emmanuel Onunwor: These are difficult times. We need to be very mindful of that. You cannot just go on people and put pressure on them to pay, pay from what?

City management expert Kevin O'Brian is an adjunct faculty member of Cleveland State University's Levin College of Urban Affairs. He agrees that more taxes may not be the answer, even if voters pass them.

Kevin O'Brian: At some point you hit the proverbial wall of being able to have higher yields on the tax levy. Incomes are going down, so it doesn't matter what you tax people, they only have so much to pay out to begin with.

The city will have to negotiate with the state over particulars of its 5-year plan. Mayor Onunwor says he'll find ways to reduce heavy demands on the general fund, like finding a cheaper source of water for the city. State regulators and city officials say East Cleveland could be ready to move out of fiscal emergency in the next year or so. But O'Brian is not so sure.

Kevin O'Brian: I don't think so, no. I think many of the issues are structural issues in East Cleveland. By that I mean having a weak tax base and a tax base that shows little promise of improving in big steps anytime soon.

But O'Brian believes the city is making progress. He says in order to bring in new businesses, jobs, and residents with middle-incomes, East Cleveland should be calling on institutions and political leaders for more help. Congresswoman Stephanie Tubbs-Jones offers similar advice.

Stephanie Tubbs-Jones: Since Mayor Onunwor changed his party to Republican, he should ask those folks to give his city some help to bring it back to the fore. We are all affected by what happens in East Cleveland.

In fact, according to the Center for Regional Economic Issues at Case Western Reserve, quality of life issues are becoming more important as we compete with other regions. So any efforts to make East Cleveland a better place to live and work benefits the larger community.

The city is working with other communities on some issues. Just last week, in a partnership with the Cuyahoga Metropolitan Housing Authority, East Cleveland broke ground for the first of 80 new houses to be built in decades. And the city is attracting new residents like physician Pat Blochowiak, who came for the housing, but is staying for the people.

Pat Blochowiak: This community is really great for somebody who wants to be involved. We're starting a youth orchestra. Our farmer's market is growing. So many things are going on on a shoestring budget.

Mayor Onunwor salutes this kind of enthusiasm. It's his belief the city needs not only fiscal stability, but a more positive view of itself that will sell businesses on locating here. For now, the city is taking each step one at a time on the road to making East Cleveland the comeback community. In East Cleveland, Karen Schaefer, 90.3.