A Cincinnati City Council committee voted Monday to keep the property tax rate at 6.1 mills, the second year in a row without the decades-long "rollback" of lower rates.
The rate applies to calendar year 2025. Council set the rate for 2024 a year ago, when they voted to end the rollback policy for the first time.
"The elimination of the rollback now allows the city to collect additional revenue as property values increase," Finance Director Karen Alder told council.
Values rose quite a bit this year. The Hamilton County Auditor determined residential values are up 32% and commercial values are up 16%, for an overall increase of 25%. The state is reviewing valuations and is expected to finalize them by the end of the year.
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Even with the expected increase in revenue for the city, it's not enough to keep pace with expenditures. If the state approves the 25% value increase, the city will still face a $21.9 million deficit in fiscal year 2025.
"While we've seen some relaxation of inflation on some commodities, expenditures are still outpacing revenues and we expect that trend to continue for fiscal year 2025," Budget Director Andrew Dudas said.
A $21.9 million deficit is manageable since the city still has $25.2 million in federal stimulus from the American Rescue Plan Act.
"Fiscal year 2026 will be the first first year without American Rescue Plan dollars to fill any budget deficit, so we do expect a sizeable deficit that will need to be closed in fiscal year 2026," Dudas said. "Because of that, maintaining the current millage rates is critical to providing necessary funding for critical city operations and does help to reduce our reliance on the income tax."
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Property tax revenue makes up about 7% of the General Fund, the second largest revenue source after the income tax.
The Budget and Finance Committee moved the measure ahead "without objection," meaning no roll-call vote. All nine council members are members of the committee, though Jeff Cramerding was not present for the discussion. The measure will be up for a final council vote Wednesday.
What is the rollback?
The city charter, approved by Cincinnati voters, allows a maximum property tax rate of 6.1 mills. Council can approve a rate lower than 6.1 mills, but not higher.
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 continued to support that policy until last year, 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.
