Thursday, July 01, 1999
District fears $19M cut on inventory tax
BY DANA DiFILIPPO
The Cincinnati Enquirer
Abolishing the inventory tax could eventually cost Cincinnati Public Schools $19 million a year, spurring cuts in student services or higher levies, school district officials say.
CPS board members agreed Wednesday to urge Gov. Bob Taft and legislators to boost state support to replace the money the 47,200-student district will lose in inventory taxes. The board was meeting in a special session to approve budget appropriations.
The inventory tax is a personal property tax businesses pay on their inventories, machinery, equipment, office furniture and fixtures. Business leaders have long complained that it places them at a disadvantage over other states.
State lawmakers agreed to abolish the tax over 25 years. That means CPS will lose $750,000 in 2000, and up to $19 million annually when the tax is totally eliminated, board member Catherine Ingram said.
A report by the Ohio School Boards Association showed that immediately eliminating the tax would cost schools $474 million. With the phase-out, the first-year statewide loss will be about $19 million, according to the report.
“There was no remedy made to hold school districts harmless,” Ms. Ingram said.
The board's objections echoed earlier complaints about state support of CPS schools.
Last week, CPS administrators warned they'd have to slash student services or seek higher taxes after lawmakers rejected their request for $5 million in magnet school funding. But Senate President Richard Finan, R-Evendale, said he told them months ago they shouldn't expect extra aid because CPS no longer is under desegregation orders, which spurred the creation of magnet programs.
One critic predicted CPS' frequent fusses about finances could backfire.
“They just keep on harping about how much money they're losing, but they got double-digit increases in state aid,” said Tom Brinkman Jr. of Mount Lookout, who heads the Coalition Opposed to Additional Spending and Taxes (COAST). “Let them raise the millage. The higher they put the millage up, the higher the chances are they're going to lose.”
State support of CPS will jump 12 percent in each of the next two years.
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