For nearly twenty years, Barb Vaughn and her family have taken pride in keeping up their house on a tree-lined, quiet street in Garfield Heights. Now they also tend to the foreclosed house next door that's been on the market for nearly 18 months. It's one of four foreclosed houses on Vaughn's block.
Barb Vaughn: I had my house reappraised, just out of curiosity. It's gone down $13,000 in two years.
Saito: So are you going to get it reassessed?
Barb Vaughn: We're debating that.
City officials in Garfield Heights worry Vaughn is just one of many citizens that are considering asking for property tax reductions, if they haven't already. And that's something the city can barely afford. Garfield Heights is running $1.3 million dollars in the red. Mayor Tom Longo says in the first half of 2007 property taxes were down half a million dollars.
Tom Longo: If we do nothing in the city of Garfield Heights, I mean nothing: fix no roads, buy no equipment, none of that, our expenses go up an average of $465 thousand a year. So you take a half a million dollars that covers...well it's worse now because of gasoline prices. And so we're trying to pace ourselves to see just exactly what it means.
Garfield Heights is not filling vacating positions in city government and the city's schools are preparing an income tax increase to go before voters this August. Garfield Heights is not alone. Luke Frazier is the executive director of the First Suburbs Development Council, a consortium of cities adjacent to Cleveland.
Luke Frazier: The cities in the consortium are struggling. They don't have the additional revenues that they need to provide essential services and some of that is because the houses are vacant, therefore residents are not living there, therefore, income taxes are not being paid.
Financial institutions own the lion's share of these vacated houses and they pay property taxes. But now, Garfield Heights Municipal Court Judge Deborah Nicastro says she's seeing cases where banks are selling off properties for pennies on the dollar to investors who aren't keeping them up and are late on their taxes.
Deborah Nicastro: The house has gone through foreclosure, nobody bought it at sheriff's sale and the bank has just walked away. Now that house is sitting there. The homeowner probably moved out six months, seven months ago. They can't even find the person who's name is on the title.
And the foreclosures keep coming. With help from the local court, Garfield Heights City Council President Frank Wagner has been organizing foreclosure prevention summits for residents late on their mortgage payments.
Frank Wagner: We are losing one and a half homes per day to foreclosures here in the city of Garfield Heights and we have well over ten percent of our housing stock in foreclosures and empty.
The First Suburbs Consortium is helping inner ring cities apply for parts of a $600,000 grant to think up new ways of dealing with vacancies. Cuyahoga County Treasurer Jim Rokakis is proposing legislation that would allow counties to open land banks that could hold properties lenders want to off load. Land banks hold and assemble property for redevelopment later. Shaker Heights Mayor Earl Leiken says the land bank would be a boon to the inner ring suburbs.
Mayor Earl Leiken: We feel we're controlling situation. In some areas the situation is almost out of control and the county is stepping in to provide control and management of all these properties.
But no one sees an end to the budgetary pain. In Garfield Heights, Mayor Tom Longo wouldn't talk about job cuts or changes to city services due to the growing tax revenue shortfalls. He's waiting until he gets the next statement of tax collections from the county auditor's office.
Mayor Tom Longo: The next reappraisal could be a very nasty situation for every community in northeast Ohio. We just take it one day at a time because it's out of our control.
The next county reappraisal is set for 2009. Mhari Saito, 90.3.