BY MICHAEL HAWTHORNE
Enquirer Columbus Bureau
COLUMBUS -- Cincinnati dodged a multimillion dollar tax change Thursday that moved so quickly city officials almost did not notice it.
Responding to an Ohio Supreme Court decision issued last week, the Ohio House approved legislation prohibiting cities from taxing utilities, gasoline, beer, cigarettes and other products that historically have been reserved for taxation by the state and federal governments.
Before sending the measure to the Senate on an 88-5 vote, the House amended it to renew the authority of cities such as Cincinnati to assess a tax on admissions to for-profit events, including Reds and Bengals games.
When the massive bill was introduced earlier this week, it would have prohibited cities from imposing admissions taxes, which would have cost Cincinnati about $2.6 million annually.
It also would have cut off a potential source of money for Cincinnati Public Schools. City officials are considering an increase in the 3 percent admissions tax to help increase school funding.
"That was an oversight we moved to correct as soon as it was brought to our attention," said Rep. E.J. Thomas, a Columbus Republican who chairs the House Ways and Means Committee.
City officials are still trying to interpret what the changes mean.
"This is what happens when legislation is made in haste," said City Manager John Shirey. "Usually when legislation is done and drafted that way, mistakes are made."
Cincinnati already stands to lose about $360,000 a year under the House-approved measure, which among other things would eliminate the city's 43-year-old municipal income tax on utilities.
Lawmakers made the changes after the Ohio Supreme Court ruled last week that municipalities have the authority to impose taxes "in the absence of an express statutory prohibition of the exercise of such power by the General Assembly."
Until now, most cities have operated under a 1925 court ruling that many areas the state taxes are off-limits to them.
Last week's court decision appeared to favor Cincinnati and two other municipalities in a lawsuit filed by Cincinnati Bell Telephone Co. The company sought more than $955,000 in combined refunds of taxes paid to Cincinnati, Blue Ash and Fairfax.
Bell filed the lawsuit in 1994 after realizing it was the only Ohio telephone company paying a municipal income tax on interstate revenues.
Under the court's decision, it appears Cincinnati Bell will be liable for back taxes. But the House changes would let the company off the hook in the future.
