“It was the best of times, it was the worst of times.”
Charles Dickens wasn’t talking about the city of Cincinnati in 1859, but as the city makes its plans for these next two years the oft-quoted first line from “A Tale of Two Cities” sure does fit.
On Monday, the city’s budget office released its forecast for the next fiscal year – a budget deficit of $22 million. That’s right, the city estimates revenues of just $355.4 million compared to $377.4 million in expenses. Already $1.1 billion in debt – it appears it’s the worst of times for the Queen City.
Those of you who are like me will see this number and fear the worst, a downgrading of the city’s credit rating. Facing separate reviews of the city’s finances this month by the ratings agencies Standard & Poor’s and Moody’s, the possibility is looking more and more real by the day. And should the city’s credit rating be downgraded, it’s just a short hop and a skip to becoming the next Detroit.
Fear not though, because the city also recently found out it is just one of eight cities nationally to be selected as a finalist to host to the 2016 Republican National Convention. And just when it appeared the news couldn’t get any better, the city also happens to be one of just 24 cities vying for the Democratic Convention.
It would appear that despite it being the worst of times down in city hall, with a real chance at hosting one of the “Super Bowls of politics” it also happens to be the best of times for the city herself. However, a word of caution from “conventions past” to the City officials who might be banking on the party conventions providing the answers to their financial woes.
A 2008 report written by researchers at the College of Holy Cross found that since 1970, “neither the presence of the Republican nor the Democratic National Convention has a discernable impact on employment, personal income…in the cities where the events were held.”
Beyond the research suggesting that the expected economic boon might not come is the costs incurred by last cycle’s host cities. The convention in Tampa cost roughly $50 million, although a majority of it was underwritten by corporate sponsors and private donors. In Charlotte, where the city was bared by the Democratic National Committee from soliciting corporations for money, the city was expected to come up with just shy of $40 million.
Now to be fair, thus far it appears that throughout the selection process for the Republican Convention there has been a large amount of cooperation between local party officials and the community. Working closely together with the Cincinnati USA Convention Center and Visitor’s Bureau and securing the support of Western & Southern Financial CEO John Barrett, things are off to a solid start for the local Republican Party in terms of finding the necessary community support
Also worth noting is that while the city may not be able to bank on the success of the conventions to solve their budgetary problems, the economic impact of the most recent conventions was considerable. Following the 2012 convention Tampa, which played hosted to the Republican’s, estimated an economic impact of $404 million. In Charlotte, the host site of the Democratic National Convention, the city reported $163 million in direct spending as a result of the convention.
Lastly I must say, as a fan of both presidential politics and a good story, it would be something to see my hometown of Cincinnati play host to the Republican Convention for the first time since 1876. Then, it was Ohio’s native son Rutherford B. Hayes accepting the nomination for the Republican Party and in 2016 it may very well be another Ohioan accepting the nomination, Cincinnati’s own Sen. Rob Portman.
All the excitement aside, before the Queen City rolls out the red carpet and buys the balloons, the city should have realistic expectations about their chances and what hosting a national convention means in terms of financial gain, if selected.
It isn’t going to be a magic pill and the city should focus on getting its finances in order. Still beyond the budgetary problems, Cincinnati is ready to shine on the national stage, and to quote Dickens:
“Cincinnati is a beautiful city; cheerful, thriving, and animated. I have not often seen a place that commends itself so favorably and pleasantly to a stranger at the first glance as this does.”