A proposed Cincinnati charter amendment would ban new residential tax abatements unless the housing is affordable. The Cincinnati Federation of Teachers is collecting signatures now, hoping to get the measure on the November ballot.
Organizer Michelle Dillingham says abatements cost Cincinnati Public Schools millions of dollars a year.
"Public schools rely heavily on property taxes for funding," Dillingham said. "And the school district is essentially a passive loser in City Council's tax incentive programs, especially in the case of residential — they have no say."
A residential abatement eliminates property tax on new value added to a property for a set amount of time.
"For years, we've been advocating for policy change," Dillingham said. "[There's] just a real frustration with the new mayor and council who sort of ran on the issues said that they would do some reforms. And while they did reform it, those were not what we feel are needed."
Council passed significant changes to the residential abatement program about a month ago, which go into effect Sept. 1. The new program will offer abatements to homeowners in all 52 neighborhoods, but the wealthiest neighborhoods will be eligible for the least valuable abatements.
RELATED: Council approves big changes to Cincinnati's residential tax abatement program
The charter amendment proposed by CFT would limit new abatements to housing affordable to households making 80% or less of the Area Median Income of the city (which is much lower than the AMI of the metro area that includes several surrounding counties).
"I think that this is a terrible idea," said Council Member Jeff Cramerding, chair of the committee that passed the recent reform. "In a vacuum, it's very easy to demonize tax abatements and say that they are a bad thing. But when you look at the countless projects that have happened throughout the city — that would not have happened without abatements — people, neighborhoods, citizens, all uniformly welcome and appreciate these projects."
CFT commissioned a study from Good Jobs First, a D.C.-based policy thinktank, that estimates CPS has lost tens of millions of dollars in revenue over the last six years.
City officials say abatements don't take any money from CPS because it only forgoes tax on value that theoretically wouldn't exist without the incentive of an abatement.
RELATED: How Cincinnati's residential tax abatement program works, and how it could soon change
The Good Jobs First report is based on Annual Comprehensive Financial Reports (ACFRs) — disclosures most school districts are required to file annually to report lost revenue due to tax abatements. The report says CPS is out of compliance with these reports. CPS did not respond to a request for comment in time for publication.
The City Manager's Office released a memo Feb. 27, estimating what CPS revenue would look like if all current abatements were transitioned to the new requirements. In that hypothetical scenario, CPS would get about $1.3 million in additional revenue a year.
The charter amendment needs about 5,400 valid signatures from Cincinnati voters in order to get on the ballot.
Read the full proposed charter amendment below:
Tax Abatement Ballot Initiative April, 2023 by WVXU News on Scribd
