BY LISA DONOVAN
The Cincinnati Enquirer
With a majority of Cincinnati City Council poised to approve a ticket tax hike to pay for building and repairing local schools, opponents of the measure unveiled Wednesday what they call a better plan that would not raise taxes.
"This proposal is being presented as an alternative to the plan dropped out of the blue last week by a majority of (council) members," said Councilman Todd Portune, one of four council members who oppose the tax increase.
He and council members Charlie Winburn, Jeanette Cissell and Phil Heimlich announced a different school-funding formula that would generate more than $100 million during the next 20 years. The plan includes:
$44.9 million that would come from anticipated growth in admissions tax revenues as a result of the construction of two new stadiums. Proponents think the new sports arenas will draw larger crowds. $16 million drawn from the city's projected surplus -- or unspent money -- in 1999.
Slowing the growth of spending from the proposed 2.5 percent increase in 1999 to 2.1 percent for that same year. Assuming 3 percent growth in spending after 1999, it is projected that $1.4 million will be saved for the next 21 years. That would result in $29.4 million going to schools.
$5 million that would be generated by increased earnings tax revenues. Proponents anticipate additional work related to stadium construction, and that means more people paying the 2.1 percent earnings tax levied against those who work or live in the city.
$9.9 million in interest on the reserve that builds up as the city contributes $5 million annually for the next 20 years.
Because the plan would fund $105 million, $5 million more than the commitment to Cincinnati Public Schools, the remaining money would be put back into the general fund. The measure was formally introduced Wednesday at council, but no action was taken.
A majority of council has already given first-round approval to a plan to boost the admissions tax. The proposal calls for raising the 3 percent admissions tax to 4.25 percent for 11 years, starting in 1999, before gradually returning it to 3 percent in 2020.
The admissions, or ticket tax, applies to a range of venues, including movie theaters, private golf courses, and Bengals, Reds and University of Cincinnati sports events.
Out-of-town entertainers -- from musicians to visiting athletes -- also would be subject to the city's 2.1 percent earnings tax.
Council members Bobbie Sterne, Minette Cooper, Dwight Tillery, Tyrone Yates and Mayor Roxanne Qualls all voted for the measure, and final approval is expected at Wednesday'scouncil meeting. Proponents say money generated by the admissions tax increase, which would make up the bulk of the $100 million commitment, would be the most reliable funding stream.
"It spreads the burden across the city and the region in a way which is highly equitable," Mr. Yates said. "The reason for this is that as the American and regional economy soars, the very small incremental increase is easily absorbed on the strength of the economy itself -- as to be almost negligible to the individual." But Mr. Heimlich said Wednesday that there's enough money in the budget and from other sources to pay for the schools. "Increasing taxes should be the last resort, not the first," he said.
A financial analyst told members of council the city might enjoy a surplus of $37 million to $47 million total over the next six years.
But during council's weekly meeting Wednesday, Ms. Qualls argued that those are just projections. She also objected to the use of the word surplus, saying the money is technically "carry-over" dollars from previous years yet to be spent.
"There is a list of capital commitments and needs which far exceed the carry-over," Ms. Qualls said after Wednesday's meeting. "Many of those capital needs and commitments are for projects already approved by council."
City Manager John Shirey said he has a project list that adds up to roughly $600 million.
Mr. Winburn said that if the tax hike passes, he will work with his coalition, made up of council members, as well as officials in the sports and entertainment industry to reverse the measure through a ballot referendum.
He and other members of the coalition confirmed Wednesday that they were working on a television advertisement to promote the cause.
It is reminiscent of a coalition that formed last summer to fight a similar tax increase that council eventually shot down.
The funding commitment for Cincinnati Public Schools was part of a city-county deal paving the way for the 1996 countywide vote to raise the sales tax to build new Reds and Bengals stadiums.
