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Because of how Ohio funds local governments, a strike by the UAW could have a difficult impact on host cities

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Posted at 6:36 PM, Sep 12, 2023

PARMA, Ohio — As talks between the United Auto Workers and the big three automakers continue in an effort to avert a strike at 11:59 p.m. Thursday, watching closely are the Ohio communities home to these plants. In Parma, home to GM’s stamping plant, Mayor Tim DeGeeter enjoys a good working relationship with both the local UAW and GM management, but he's hoping they come together and reach an agreement for selfish reasons.

"Cities survive on income tax, and they're one of our biggest employers,” he said of GM. “So the longer they're out, that also affects us as a city on what we do as far as services go."

Yes, local governments are funded by taxes and fees, with property taxes, on average, being the biggest one for most communities across the country. Some, however, differ — about 16% relying more heavily on sales taxes to keep the municipal lights on and an even smaller 8% nationwide, including Ohio, rely on income taxes to do it.

So a large employer like GM, with more than 900 people, means a large check for a city like Parma, but only if those people are working and getting paid.

"So yeah, they are a lifeline for us no matter what,” DeGeeter said.

On its website, GM lists Parma as generating $93.2 million a year in taxable income, so at Parma’s 2.5% income tax rate, that comes to $2.3 million a year, or roughly $45,000 a week for the city.

"So you can do simple math and get close to how important they are,” said DeGeeter.

Ed Orcutt sees those numbers too. As mayor of Brook Park, he has a similar working relationship with Ford. Engine Plant #1 is home to more than 1,700 workers making the impact on their bottom line even greater than that of GM in Parma. As he watches from a distance, he remains hopeful.

"We're very optimistic that the union and the employer Ford will be able to come to an agreement that works for both sides, and we're looking for that to happen as soon as possible,” Orcutt said.

DeGeeter weathered a similar storm in 2019 when GM workers were out on strike for six weeks. It taught him to get creative with each passing week, he said, and to pray.

"On Sunday, you say another prayer hoping they get back to the bargaining table and that reasonable heads come together and they get a fair contract and everybody gets back to work," he said.