East Cleveland Confronts New Budget Gap Amid Long History of Fiscal Trouble
It used to be that East Clevelanders, on average, made an income in line with the rest of the country—enough to own a home and take care of a family. Now, median household income is $21,000—well below the national average. Two out of every five residents live in poverty. Adjusting for inflation, city income tax collections have been cut in half since the year 2000.
These days, Mayor Gary Norton often talks about this history.
“What we have to do is recognize that it is a structural problem. It's a structural problem," Norton said. "This is not anything that has materialized over the past three or four or five years. It’s really 30 years in the making…In good times, a city’s expenses could be paid with cash left over. But over time, as the population declines, as revenue declines, those expenses don’t decline, they continue to go up.”
Fifty years ago, African-American residents moved to East Cleveland—some seeking a suburban life, others pushed out of their old neighborhoods by urban renewal projects, according to The Suburban Racial Dilemma, a book by Cleveland State University professor W. Dennis Keating. As they came, whites and businesses left.
CSU professor Norman Krumholz said the deck was often stacked against East Cleveland’s new black residents.
"The banks simply drew a red line around these neighborhoods for a variety of reasons having to do with race and poverty, and didn’t make any loans," Krumholz said. "So if you owned a home in East Cleveland or Glenville, and you wanted to fix it up, and you had a decent job and a decent income, and you went to the bank and you asked for a home improvement loan, you couldn’t get it, because your neighborhood was redlined. That makes deterioration of housing almost a self-fulfilling prophesy.”
Residents—black and white—have been leaving for decades as neighborhoods declined.
Political corruption sent officials to jail in the late 1980s. East Cleveland entered fiscal emergency shortly afterward.
Over the past 15 years, foreclosures spread across the city. Property values sank and thousands of people left, drying up the tax base. Since 2000, the number of residents working—and therefore paying income taxes to East Cleveland—has fallen by 45 percent.
The city briefly emerged from fiscal emergency in 2006 and found new revenue by installing traffic cameras.
“We used the money to build up the police department, to increase the employees in the service department," said Eric Brewer, who was mayor from 2006 to 2009.
Though he said he opposed the cameras, Brewer said they helped—but not for long.
“And so for the first couple of years, we did pretty good with the traffic camera revenue," he said, "but of course, with those traffic cameras, once people’s driving habits change, and they start recognizing that this is the way it is, you’re going to lose revenue.”
Brewer lost a nasty reelection fight to current mayor Gary Norton. The city’s problems continued to mount. The post office closed and the Cleveland Clinic shuttered Huron Hospital. East Cleveland took a million-dollar hit when the state cut aid to local governments.
And even though revenues dropped off a cliff, state audits show the city continued spending. East Cleveland returned to fiscal emergency in 2012.
Councilman Nathaniel Martin said he and colleagues share some of the blame, but he accuses Mayor Norton of irresponsibility.
“This situation we find ourselves in…could have been avoided," Martin said. "It would have been some tough cuts, but you cut when you have to. If I have a credit card of $5,000, but I’m constantly spending $10,000 on my credit card, I get penalized. Well, we’re paying the penalty for mismanagement.”
Now the city owes more than $3 million in past-due bills, according to a list provided by state auditors dated Feb. 19.
But to accusations of overspending, Norton said he simply refused to deprive East Clevelanders of city services they deserved.
“We could have closed our police department. We could have closed our fire department," Norton said. "And we might have more money today if we had done that. But what is a city where its police department is closed? What is a city where its fire department is closed?”
But now the city is cutting—and cutting deep at the urging of state auditors who are keeping watch over city coffers.
Norton says East Cleveland voters should begin the process of considering a merger. At the same time, a different campaign has also risen up—this one to recall Norton. The future of the city may rest with which effort succeeds at the ballot box.