About 30 people spoke to Cincinnati City Council at the second public hearing for the next budget Monday night.
The crowd at the Sayler Park Recreation Center asked for funding for outside groups like the Center for Closing the Health Gap, Bethany House Services, and MORTAR.
Ten more people spoke in favor of the city building a skate park.
PJ Schomaeker, a student at the University of Cincinnati, asked council to prioritize pedestrian infrastructure.
"We also desperately need more comprehensive public transit, like expansion of the streetcar, the bus rapid transit plan, and more protected bike paths," Schomaeker said. "The amount of the budget that is allocated to the police department harms our communities and even putting a small fraction of that funding into improving pedestrian and public transit. Infrastructure would make Cincinnati a much better place to live."
A few dozen people marched on UC's campus earlier Monday night, advocating for improved pedestrian safety.
Reg Dyck with the local chapter of the Democratic Socialists of America asked Council to create a "Right to Counsel" program for renters facing eviction.
"Evictions disproportionately affect marginalized people, poor people, people of color, women, and maybe most tragically, households with children," Dyck said. "Right to Counsel programs cost money, but they also save money for cities as well, in terms of social costs of homeless shelters, health care, and other social services."
The DSA is asking for a program eligible for tenants making up to 200% of the federal poverty level.
A change to the budget process this year is how nonprofits and other third-party organizations can request city funding. The new process requires organizations to formally apply for a one-time grant, instead of lobbying council members directly.
Although this funding is less than 4% of the General Fund, it used to dominate public and council discussion during budget season.
Paul Haffner is president of Lighthouse Youth and Family Services, which requested $150,000 in leveraged support last year for the Sheakley Center for Youth, which serves young adults ages 18-24 at risk of homelessness.
"We did not receive that, but greatly appreciate the new leveraged support process and are applying again this year," Haffner said. "We have been operating ... typically at about an $800,000 to $900,000 annual deficit. So it's a major fundraising gap."
Haffner says their application for leveraged support this year will again ask for $150,000.
The application portal for the new leveraged support process opened Feb. 14 and will close March 24. The application is available on the city's website.
Public engagement for the budget started much earlier than usual this year. Last year, the first hearing was in early April, and before 2022, hearings were always held in May and June.
Presentations from each city department will happen throughout April.
More public comment will be available at regularly scheduled Budget and Finance Committee meetings in late May and early June, plus an additional public hearing June 5.
Budget and Finance Committee Chair Reggie Harris anticipates passing a Budget Policy Motion on April 19. The final deadline for budget passage is June 30, but Council will likely pass the budget June 21.
One more public hearing is scheduled before the city manager and mayor release their budget proposal:
- Wednesday, March 29 at 5:30 p.m. at the McKie Recreation Center (1655 Chase Ave)
Understanding the city budget
See the administration's full presentation below (story continues after):
FY 2024 Admin Budget Presentation by WVXU News on Scribd
Here are some common questions about the budget process to help you understand the discussions.
Where can I see budget information online?
Documents are published on the city website under the Finance & Budget page: Cincinnati-oh.gov/finance/budget
In a couple months, that page will include the first draft of the budget (from the city manager and mayor). Once council passes a final budget, the page will include an updated document with the final version.
RELATED: Here's the timeline and process for Cincinnati’s next budget
There are also links to prior years' recommended and approved budgets.
Why does a new budget start in July instead of January?
The city budget is based on fiscal year rather than calendar year.
- Fiscal Year 2024 (often abbreviated as FY24) begins July 1, 2023 and ends June 30, 2024.
- Fiscal Year 2025 begins July 1, 2024 and ends June 30, 2025.
Where does city income come from?
The majority of city revenue comes from income taxes, also called earnings taxes. Usually that makes up as much as 72% of overall revenue; this year (like the last couple years) is unique because of federal stimulus. Here's the breakdown of revenue for FY23:
- Earnings taxes: 61.2%
- American Rescue Plan Act: 15.3%
- Property taxes: 5.2%
- State Shared Revenue: 2.6%
- Casino tax: 1.7%
- Investments: 0.7%
- Parking meter: 0.3%
- Other revenues: 13.0% *
* Includes: license and permit fees; admission taxes; short-term rental excise taxes; buildings and inspections fees and permits, etc.
The current city income tax is 1.8% of gross earnings and the revenue is divided into three categories:
- 1.55% for the General Fund
- 0.15% for permanent improvements (capital)
- 0.1% for maintenance of city infrastructure
The most significant change to city revenue in recent years is a reduction in the Local Government Fund (State Shared Revenue). The state imposed cuts to this fund about 10 years ago; the amount allocated to Cincinnati in FY22 ($11.7 million) is a 72% reduction compared to 2011 ($40.7 million).
RELATED: How to understand Cincinnati's $1.5 billion 2022-23 Budget
What makes up most of the budget?
82.7% of the General Fund goes to personnel and benefits. And, 84.2% of city employees are represented by labor contracts negotiated with a union.
Who decides how to spend taxpayer money?
The process begins with City Manager Sheryl Long, who will work with her team to prepare the first draft of a budget. That draft is passed along to Mayor Aftab Pureval, who has the option to make any changes before it goes to Council.
Council has ultimate authority over the budget and must reach a majority agreement (five of nine council members) to approve the spending plan.
How does a biennial budget work?
The city budget technically covers two years at a time, but Council still votes to approve funds every year.
Last year was a "budget update" to account for differences in actual revenue compared to expected revenue. Practically speaking, however, it was an entirely new budget prepared by an entirely new administration.
This year, Council will approve a biennial budget for FY24 and FY25.
What's the difference between operating and capital budgets?
The operating budget includes the services provided by the city, like police officer patrols, filling potholes, trash collection and operating the water treatment system. It includes wages for city employees and the cost of supplies needed to deliver services. The operating budget includes the General Fund, where City Council has the most flexibility in funding decisions.
General Fund dollars can be used for capital projects, but capital dollars cannot be used for operating.
The capital budget covers purchasing or improving city assets like buildings and vehicles. It includes assets that cost at least $10,000 and last at least five years. The Capital Budget includes some cash and some borrowing.
RELATED: Public input on the Cincinnati budget is starting early this year
The city can also take on debt for capital projects, but the amount of debt is limited by the amount of revenue expected from taxes — the city has to bring in enough money to make payments on the debt. If the city wanted to take on more debt for capital projects, Council would have to approve an increase in taxes. Right now, the city issues bonds based on property taxes.
The city can't issue bonds on assets not owned by the city; that also applies to city-owned buildings with long-term leases like Music Hall's 100-year lease. Playhouse in the Park is another example of a city-owned building that can't use bonded capital for improvements because of long-term use agreements.
A portion of income tax revenue is set aside for the Capital Budget: 0.15%, which equals about $9 million each year for FY22 and FY23. This is cash-in-hand the city can use to pay for capital projects, which could include buildings not owned by the city.
