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More money for public safety headlines Cincinnati's next budget

cincinnati city hall
Jason Whitman

Cincinnati officials are predicting a large budget deficit next year, but the budget City Council passed Wednesday has no cuts thanks to federal stimulus money.

A majority of supported the recommendations of City Manager Sheryl Long and Mayor Aftab Pureval, and added $750,000 in spending.

The budget includes increases to the police and fire departments and a decrease to the overall General Fund.

Pureval says he's proud of the collaboration between city departments.

"We have had very difficult decisions to make and from the beginning, this body has asked the right questions has spent time listening to residents and putting forward suggestions," Pureval said Wednesday. "And the budget we're considering today is all the more resilient and impactful because of your work."

Long says over the past year, General Fund operating expenses have grown 6.9%, while revenue is projected to grow only 5.1%.

"We must continue to deliver services that sustain, improve and grow the city of Cincinnati, but we will need to do it with fewer resources," Long said. "My strategy for meeting that challenge is to break things down in order to build on back up."

The General Fund is estimated at $527 million, about 5.9% less than last year — that's because of the city using much less federal stimulus. A roughly $28.2 million deficit is filled by the American Rescue Plan Act, meaning no budget cuts this year.

Officials are predicting a $9.4 million deficit for fiscal year 2025, even after using the $25.2 million left from ARPA; it will be the last fiscal year with pandemic stimulus funds.

Mayor Pureval had the chance to make changes to the manager's proposal before transmitting the budget to council. Instead, Pureval recommended a separate plan to spend $10.7 million. The money comes from tax credits from the Cincinnati Southern Railway Board (about $6 million) and re-allocations from fiscal year 2023 (about $5 million):

  • Infrastructure improvements: $6.9 million
  • Pilot programs: $2.1 million
  • Community empowerment funds: $1.5 million
  • Leveraged support (one-time): $190,000

Read the mayor's full budget message and proposal below:

"There are looming deficits, there are inequities in our city," Pureval said. "But as we work to grow, as we fund our priorities and have intentional conversations about our path forward, I know that we are doing so as a united community where everyone's values can be heard."

LEARN MORE: Cincinnati considering guaranteed income, medical debt relief, child savings account programs

Pureval's proposed ordinance included launch funding for three pilot programs to "promote financial freedom among Cincinnatians."

  • Medical debt relief: $1.5 million: A community partner for this program hasn't been finalized yet, but one possibility is the national nonprofit RIP Medical Debt. The model involves buying debt in bundles for a fraction of the original cost, according to the organization's website, meaning $100 can relieve up to $10,000 in debt. "Debt is one of the biggest challenges holding residents back," Pureval said. "With this investment. We have the ability to coordinate with partners to relieve medical debt for an estimated 30,000 Cincinnatians."
  • Guaranteed basic income study: $250,000: Pureval says this is "seed money" for a program that would cost about $2 million, with the difference made up by private donors (not yet identified). The pilot program would "explore how a basic income can help our most vulnerable residents lift themselves up and succeed," Pureval said. It would include 100 Cincinnati residents.
  • Child savings accounts: $375,000 (over three years): "Students who have access to a savings account are four to six times more likely to attend college," Pureval said. "By supporting this early investment, students can understand the benefits of saving, learn the basics of investing, and have a greater leg up at finding their future education." He says the initial idea is to give $50 in a savings account to each child in the Preschool Promise program, or $125,000 a year for three years.

Council's changes included setting aside the $2.1 million for Financial Freedom projects, but without specifically allocating to these three recommendations. Council Member Liz Keating led that effort, saying Council should see a final report from a months-long study through the Cities for Financial Empowerment Fund before deciding on a specific spending plan. That final report is expected next month.
The final budget vote involved eight ordinances — for the operating budget, capital budget, the mayor's additional spending, and council's additional spending — plus several bond ordinances.

Council voted 8-0 on most of the ordinances, including all the recommended spending from the City Manager. Council Member Victoria Parks was excused from committee and council meetings this week. On one ordinance, the vote was 7-0 because Vice Mayor Jan-Michele Lemon Kearney recused herself: $350,000 for the African American Chamber of Commerce, where her husband works.

Two council members opposed parts of the budget: Liz Keating and Jeff Cramerding.

Keating says Council failed to make hard decisions.

"Instead, we cut nothing. And in fact, we added another nearly $11.5 million on top of the City Manager's proposal," Keating said. "We've got a projected $9.4 million deficit next year, which is 1.8% cut across the board. That's our basic services, that's our city jobs, and most importantly, that's our public safety budgets. That's not the sign of a council that's concerned about the future."

Keating opposed the additional spending from both the Mayor and Council.

Cramerding supported the Mayor's ordinance, but voted against the Council spending, saying he doesn't approve of taking the money from a reserve fund.

This story was originally published in May and has been updated several times.

Click to jump to a specific topic:

General Fund

The operating budget includes 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. Of the General Fund, 82.7% goes to personnel and benefits. And, 84.2% of city employees are represented by labor contracts negotiated with a union.

DepartmentRecommended FY24 Budget
City Manager's Office *$45,526,930
Public Services$16,254,200
Buildings & Inspections$13,411,600
Enterprise Technology Solutions$6,997,610
Community & Economic Development$4,363,420
Human Resources$4,332,490
Transportation & Engineering$3,421,070
City Council$2,339,210
City Planning & Engagement$1,600,090
Economic Inclusion$1,436,220
Citizen Complaint Authority$1,386,790
Office of the Mayor$1,047,610
Clerk of Council$824,200

*The City Manager's Office includes the Emergency Communications Center.

You can learn more about how each department spends their budget on the city's open data portal Cincy Insights:

Public Safety

The police and fire departments, combined, make up about 66% of the General Fund each year.

The proposed FY24 budget includes a 6.7% increase for CPD and a 2.5% increase for CFD.

CPD alone makes up about 34% of the General Fund in the budget proposal.

The police budget has increased 44% over the last 10 years, and the fire budget has increased 56%, compared to a General Fund increase of 46% during that time.

The city manager recommends two police recruit classes in FY24 and one in FY25:

  • 60-person class beginning in June 2023
  • 50-person class beginning in January 2024
  • 50-person class beginning in fall 2024

RELATED: Council approves pay increase, signing bonus for police recruits

Four recruit classes for CFD are recommended:

  • 50-person class beginning in June 2023
  • 50-person class beginning in February 2024
  • 50-person class beginning in summer 2024
  • 50-person class beginning in winter 2025

RELATED: Cincinnati Police District 5 will be absorbed into other districts by the end of the year

The budget draft includes funding to continue the Alternative Response to Crisis program, which started last year as a pilot to provide a non-police emergency response to calls for service related to mental health. The funding increase would make the program permanent and double the resources.

For now, the program operates during business hours Monday through Friday and primarily responds to calls for service in the Central Business District. Pureval says the expansion could include either more staff during the same hours to respond to other neighborhoods, or more staff to respond to calls overnight.

Human Services Fund

The city's Human Services Fund is administered by the United Way, which uses a competitive application process to issue grants to organizations based on council-established priorities.

The budget draft includes about $8 million for the fund, about 1.5% of the General Fund. It's the same amount as last year's record high.

From 2004 to 2017, the city budget for the HSF did not exceed 0.8% of the General Fund. Council approved a plan in 2017 to incrementally increase the percentage for the Human Services Fund until it reached 1.5% in 2023.

Council sets the priorities for the fund ahead of time and most recently updated the list in October:

  • Between 25% and 33% for an Impact Award — in this case, eviction prevention and housing
  • 20% to youth gun violence prevention and reduction
  • 25% to comprehensive workforce development
  • Between 10% and 18% for supporting, securing and stabilizing housing for high-risk populations
  • 10% for Project LIFT (direct support for emergency anti-poverty programs)
  • 2% for overhead

A volunteer Human Services Advisory Committee (HSAC) votes to recommend which organizations and programs should get funding. The United Way and HSAC presented recommendations to a Council committee on June 6.

RELATED: Program to prevent homelessness with data is the likely recipient of a $2M city grant

The recommendations for the next two fiscal years are:

  • Impact Award: $2.1 million
  • Comprehensive workforce development: (23 organizations, 25 programs: $1,994,232)
  • Youth gun violence and prevention: (23 organizations, 24 programs: $1,595,386)
  • Supporting, securing and stabilizing housing for high-risk populations: (16 organizations, 19 programs: $1,300,000)

See the full list of organizations recommended for funding here.

Leveraged Support

The other mechanism for funding outside organizations is leveraged support, included as direct allocations in the budget.

This is the first year organizations have had to formally apply for funding instead of lobbying council members directly. Council established the new process to take some of the politics out of the equation.

It defines "leveraged support" as "(f)inancial support from the City of Cincinnati to an external organization (i) as general operating support to fund their work in the City or (ii) as funding for a specific program aimed at addressing a public need in the city."

Council set seven priorities for the funding; grants were limited to between $50,000 and $500,000 with larger awards considered for "extraordinary circumstances."

It seems one organization qualifies for an extraordinary circumstance: The Center for Closing the Health Gap is budgeted for $600,000, plus another $100,000 in the mayor's separate ordinance. The organization has received $750,000 a year in leveraged support for the last several years.

City officials reviewed 92 applications for leveraged support and recommended $3,975,000 in funding for 27 organizations.

RELATED: Here's how Cincinnati is changing the process for nonprofits to get city funding

The new process does not include several organizations that did not have to apply because they manage city assets or programs. Those include:

  • 3CDC funding for Fountain Square, Washington Park and Ziegler Park
  • Findlay Market operating budget support
  • The Port
  • Women Helping Women Domestic Violence Enhanced Response Team (DVERT)

And several programs administered by the city have been called "leveraged support" in the past but will also be exempt:

  • Community Urban Agriculture
  • Green Cincinnati Fund
  • Needle Exchange Program
  • Neighborhood business districts
  • Neighborhood community councils
  • Summer Youth Jobs initiatives

See the recommended funding levels for each organization below, plus additions from the Mayor and City Council, compared to Fiscal Year 2023:

Affordable Housing

Revenue from the short-term occupancy tax (like Airbnb and VRBO) goes into the Affordable Housing Trust Fund. The budget draft includes $1.5 million from that revenue, up from $611,000 last year (although Council separately allocated stimulus funds from ARPA).

Separately, the budget includes:

  • $500,000 for the Hazard Abatement/Demolition program
  • $400,000 for the Strategic Housing Initiatives Program (SHIP) through the Department of Community and Economic Development; the funds are used to support the rehabilitation or new construction of housing units, including permanent supportive housing
  • $550,000 for the Small Scale Rental Rehabilitation Loan Program (to help owners of smaller rental properties address code violations and make enhancements for tenants)
  • $500,000 for the Home Enhancement Loan Program (HELP; a middle-income homeowner home repair program)

RELATED: Just one project in Hamilton County will get a low-income housing tax credit this year

The budget draft also includes $1 million for an "access to counsel" program for renters facing eviction. It will offer legal support and emergency short-term rental assistance.

RELATED: Tenants without an attorney in local eviction court are 84% more likely to lose housing, study finds

Pension Fund

Experts say Cincinnati needs to immediately increase its annual contribution to the retirement system for city employees. The pension fund is about 69% funded, down from 77% in 2015.

A federally mandated settlement agreement requires the city to put no less than 16.25% of active salaries into the fund each year.

The budget draft includes 17% of active salaries, the first increase to this minimum contribution since 2016.

Learn more: Cincinnati's pension fund is still underfunded, still not on track to improve

Citizen Complaint Authority

The city's independent police oversight board has a proposed budget of $1,386,790 — a 7% increase from last year, and more than double the budget in FY 2017.

Learn more: Cincinnati's police oversight board on track to clear backlog within a year, even as complaints go up

Skate Park

One topic dominated the early public hearings for the next budget: support for building the city's first skate park.

The Cincinnati Skatepark Project started raising support and private funds about a year ago; they're asking the city to build and operate a park, rather than asking for a city check to build privately.

The mayor's separate ordinance includes $250,000 for the Recreation Commission to build a skate park.

"We're asking the private community to raise the other $250,000," Pureval said.

Randy Browne is director of operations for the Cincinnati Skatepark Project. He says they've already raised about $50,000 and he's confident the rest will come in with this city commitment.

"This really puts us in a better position to raise the matching private funds on our end," Browne said. "It's long overdue that we're getting a skate park in Cincinnati."

Pureval says a final location hasn't been decided on yet. Browne says the front-runner is a vacant field off Colerain Avenue in Camp Washington.

A mockup of a potential skatepark in Camp Washington. Cincinnati Skatepark Project founders say this is just an illustration of what a park could look like in the neighborhood -- not the final design.
A mockup of a potential skatepark in Camp Washington. Cincinnati Skatepark Project founders say this is just an illustration of what a park could look like in the neighborhood -- not the final design.

Skating Rink

Separate from the Cincinnati Skatepark Project, a large group of advocates has been asking Council to allocate funds to rehabilitate the outdoor roller rink at Sawyer Point.

It wasn't included in the first draft from the Mayor and City Manager, but Council added the $100,000 requested, which the community plans to match.

"When you have people from all walks of life coming in and saying this is a worthwhile investment, it just seemed like kind of a no brainer to match and meet them where they're at," said Council Member Reggie Harris.

The source for this funding will be the Downtown-South TIF District, which holds property tax revenue from within the district to be spent on projects that benefit the public in the same area.

"I think it's just a smart investment when we're thinking about ... how we activate spaces that support diversity and community," said Council Member Meeka Owens.

How to understand the city budget

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:

There are three relevant documents for this year: the recommended operating budget, the recommended capital budget, and the mayor's message (including his proposed plan for additional funding outside the biennal 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. A fiscal year is named for the calendar year in which it ends.

Fiscal year 2024 (often abbreviated as FY24) begins July 1, 2023 and ends June 30, 2024.

Where does city income come from?

The majority of city revenue comes from income taxes, also called earnings or payroll taxes. Usually that makes up as much as 72% of overall revenue; this year (like the last two years) is unique because of federal stimulus. Here's the breakdown of revenue for FY24:

  • Earnings taxes: 65.3%
  • American Rescue Plan Act: 5.3%
  • Property taxes: 6.9%
  • State shared revenue: 3%
  • Casino tax: 1.9%
  • Investments: 1%
  • Parking meter: 0.3%
  • Other revenues: 16.3% *

* 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 FY24 (about $15.7 million) is a 61% reduction compared to 2011 ($40.7 million).

What makes up most of the budget?

Of the General Fund, 82.7% 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 worked 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.

This year, Long and Pureval announced the budget draft together, and Pureval did not make any line item changes.

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.

This year, Council will set a budget for fiscal year 2024 and fiscal year 2025.

Next year is a "budget update" to account for differences in actual revenue compared to expected revenue. Practically speaking, however, it's an entirely new budget.

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.

The overall capital budget for FY24 is about $303 million, which includes restricted funds like Metropolitan Sewer District capital improvements, the convention center and stormwater management.

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.

Will there be budget cuts this year?

Thanks to stimulus funds from the American Rescue Plan, no departments have budget cuts.

Officials are predicting a $9.4 million deficit for fiscal year 2025, even after using $25.2 million in American Rescue Plan funds.

The administration is recommending a 1.8% reduction to all city departments to make up the deficit. However, even then, the budget draft says no layoffs would be needed.

Where can I learn more?

Balance: The City Budget Game Show

Updated: May 26, 2023 at 2:03 PM EDT
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.