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Cleveland City Council on Monday (3/15) approved a $1.8 billion budget, increasing operating spending slightly, for the city that targets money to maintain neighborhoods, help homeowners keep up their housing and bolster quality of life.

The city’s income tax revenue took a hit last year and the pandemic wiped out much of Cleveland’s revenue from taxes on hotel rooms and event admissions. Revenue in those areas is expected to recover this year, but still fall short of 2019 levels.

Cleveland was able to offset last year’s losses with the help of conservative 2020 budgeting and $60 million in federal coronavirus relief.

The budget, which includes about $670 million for spending in the general fund. It includes money for four police cadet classes, maintains city services and leaves a $20 million cash reserve to begin 2022. City Council made tweaks to the plan earlier this month that targeted:

• $1 million toward a “middle neighborhoods” initiative to stimulate investment in parts of the city that are adjacent to suburban communities before they deteriorate.
• $125,000 per ward -- $2.125 million total – to continue the program that help seniors with home repairs.
• Another $125,000 per ward for small capital projects designated at the discretion of the ward council representatives, an increase of $25,000 per ward. Projects from previous years have included park improvements, small street repairs and the development of neighborhood WiFi access.

Cleveland Finance Director Sharon Dumas recently told the council that budget projections were made based on a conservative economic recovery from the coronavirus pandemic. But the spending can be adjusted during the year if circumstances change.

One unknown is how quickly workers will return downtown, or if they will return, as the pandemic ends. That return is important for job growth and continued tax collections from worker wages and hospitality taxes such as parking.

Cleveland’s income tax is the principal source of revenue for city government. It raised nearly $442 million in 2019 but declined with job losses from the pandemic to $410 in 2020. It is projected to raise $424 million this year.