East Cleveland Seeks Bankruptcy

East Cleveland Mayor Gary Norton is currently awaiting a response to his request for approval of municipal bankruptcy for his beleaguered city. He sent a letter last week to State Tax Commissioner Joseph Testa asking that a petition be approved and moved forward.

"Despite the city's best efforts, East Cleveland is insolvent," Norton wrote. "Based on financial appropriations for the years 2016, 2017, 2018, and 2019, the city will be unable to sustain basic fire, police, EMS or rubbish collection service."

East Cleveland has been in a state of "fiscal emergency" since 2012, according to the State Auditor David Yost's office. Yost has warned the city repeatedly that drastic moves are required to back away from the brink of financial collapse.

"East Cleveland is in a class of its own," Yost told Scene when the merger talks were really heating up. "They're in fiscal emergency, and nobody's had the size of structural deficits that we've seen in East Cleveland, nobody's had them going on as long, and no city has done as little to correct the problems."

Indeed, the long-running gridlocked argument at City Hall has been one of merger vs. development: Should the city merge with Cleveland — and lose its political autonomy — or should leaders work with nearby developers in the University Circle area, drawing them in and eventually broadening the tax base?

Neither option offers a panacea at the moment.

Norton, a supporter of the merger concept for a while, seems now to have moved toward the municipal bankruptcy option. (Norton has famously wavered before. He declared brazenly in his State of the City speech in 2014 that he would not seek a merger. One year later, he began personally distributing petitions to begin the merger process.)

No city in Ohio's history has declared bankruptcy.