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Cincinnati Council ends longstanding property tax rollback, increasing the rate for 2024

cincinnati city hall
Becca Costello

Cincinnati officials are ending a policy that has capped property tax revenue at about $29 million for over 20 years.

Council voted 7-2 Wednesday to raise the property tax rate from 4.84 mills to 6.1 mills for calendar year 2024. That will bring in an extra $7 million for the next fiscal year budget, which Council will establish next June.

"This proposal starts to do the hard work of diversifying our stream of revenue," Mayor Aftab Pureval in committee Monday. "It does it by respecting the decision that was made ... by the voters to allow us to use the benefits of growing our tax base (and) growing our property values to invest it back into our residents and into our city."

The 6.1 rate is the maximum allowed in the city charter. The "rollback" started in 1999, when council decided to set the rate at 5.54 mills to keep revenue flat at about $28.9 million.

Council has continued to support that policy ever since, setting the rate at whatever was expected to bring in the same amount. The only exception was in 2012-13, when council opted to keep 4.6 mills even though it was expected to bring in less than $28.9 million.

According to city administration, the property tax base has grown by over $1.5 billion since 2005, but the city has seen no revenue gains because of the rollback policy.

City of Cincinnati

The change will cost homeowners an extra $39 per $100,000 of home value a year.

After Council's Budget and Finance Committee approved the change in a 6-2 vote Monday, two leaders in the city's business community sent a letter urging council to delay a final vote.

Jill Meyer, CEO of the Cincinnati USA Regional Chamber, and Gary Lindgren, president of the Cincinnati Business Committee and Cincinnati Regional Business Committee, write they were surprised to learn about the proposed end to the rollback policy.

"We are in alignment in seeking to ensure that our City's government achieves sustainable financial standing and can operate effectively for the benefit of all," they wrote. "However, yet another tax increase on property owners could chill investment in housing, business growth, population growth, and job creation. This is an added burden to business owners and residents."

During discussion in council prior to the final vote, Pureval said he should have engaged more with stakeholders.

"I will completely take responsibility for not engaging more or giving other stakeholders a heads up," he said. "We at the city have really urgent needs and desperate folks in our community who are asking for help, and in my haste to meet those expectations, I should have done more."

Asked why he didn't delay a vote until closer to the January 15 deadline, Pureval said he wanted to grant the administration's request to pass the measure as soon as possible "to give them the most time possible to stand up these programs."

Council Member Jeff Cramerding says he rejects the idea the change represents a tax increase.

"This is ending a decades-long policy of decreasing taxes," Cramerding said Monday. "This policy was never sustainable; you cannot decrease taxes and keep revenue flat while expenses increase with inflation.”

Cramerding was one of two council members — along with Victoria Parks — who voted in January to increase the rate to 6.1 mills for calendar year 2023. This time, all but two of their colleagues — Greg Landsman and Liz Keating — joined them. Vice Mayor Jan-Michele Lemon Kearney could not vote because she participated remotely, but said she would have voted in favor.

Along with the rate change, Council passed Mayor Pureval's motion outlining policy priorities for spending the extra revenue. Those include housing security and workforce and economic development.

"It would make sense to me if we bring in this revenue, which we desperately need, and set it aside for the anticipation of these budget shortfalls when we don't have stimulus dollars anymore," Keating said Monday. "But I'm really struggling seeing us bring this in and send it right back out the door."

Pureval says some of the priorities are expected to bring in more revenue eventually, but also says this stop isn't intended to solve all of the city's budget problems.

Landsman says the bigger problem with city revenue is a significant decrease in what the state provides in shared revenue, which has decreased 70% since 2000.

"I hope it's part of this conversation, which is the very problematic position that the state has taken in terms of taking our money, keeping it, and either spending it or putting it in their rainy day account," Landsman said Monday.

If future councils continue to set the property tax rate at 6.1 mills, officials estimate the city could bring in close to $46 million in fiscal year 2027.

See the policy priorities for additional revenue below. Actual appropriations will need to be made by ordinance as part of the budget process next year.

Updated: December 14, 2022 at 3:02 PM EST
Local Government Reporter with a particular focus on Cincinnati; experienced journalist in public radio and television throughout the Midwest. Enthusiastic about: civic engagement, public libraries, and urban planning.