Demographic divide seen in Ohio city and county credits

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Shifting population and economic tides are bolstering some Ohio city and county credits while taking a toll on the budgets of others, Moody's Investors Service says in a new report.

Columbus and Cincinnati, which have seen broad growth and improved employment, are faring better than Cleveland and other metropolitan areas rural areas stung by slow growth and declining employment.


“The Columbus area has grown faster and added more jobs than any other part Ohio in every industry except manufacturing,” said Moody's analyst Frank Mamo, who is lead author of the report.

Columbus' growth is largely attributable to its skilled workforce, strong demographic profile and institutional presence of the state capital and Ohio State University.

Cincinnati's growth is also diverse and exceeds the state average, but is slower than in Columbus.

Cleveland has experienced solid growth in leisure, hospitality, and business services, but significantly lags in most other industries. Rural trends are more nuanced as a handful of areas with energy production (natural gas in the eastern part of the state and wind farms in the northwest) are performing well, while others struggle to regain jobs lost during the 2007-09 recession, according to the report.

The trend is impacting budgets due to dynamic tax revenue and expenditure in cities, which are impacting municipal services. "Economic expansion and a growing population generally lead to stronger funding for operations and reserves," said Moody's.

Columbus, which is rated Aaa by Moody's and has plans to price $400 million of bonds in early October to fund street repairs and other infrastructure projects, has roughly $1.8 billion of debt outstanding. Cincinnati, rated Aa2 by Moody's, has $1.25 billion in outstanding debt. Both cities have experienced solid population and economic growth.

For both Columbus and Cincinnati the positive trends are tied to the presence of Ohio’s two largest state universities: Ohio State University and University of Cincinnati. Statewide higher education was essentially flat between 2010 and 2017 while enrollment at OSU and UC grew by 4% and 19% respectively.

Together the two cities account for nearly all of Ohio’s growth with their combined populations expanding by 222,400.

The rest of the state's population declined by more than 100,000. Cleveland has struggled with outmigration that is outpacing relatively weak birth rates. Other metros, along with rural areas, have experienced the most rapid rate of out-migration in the state.

These economic and demographic trends are important factors in the financial conditions of Ohio cities and counties since they are tied to tax revenue and expenditure, according to Moody’s.

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