Tuesday, July 20, 1999

Taft scuttles sales tax plan

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Convention center needs $88 million

BY LUCY MAY
The Cincinnati Enquirer

Gov. Bob Taft, left, tours Paul Brown Stadium Monday with project manager Bob Streyle. (Glenn Hartong photo) | ZOOM |

        Ohio Gov. Bob Taft on Monday shot an $88 million hole in Cincinnati's financing plan for a $405 million expansion of the downtown convention center.

        In an interview, Mr. Taft all but ruled out a method of sales tax financing that is a critical element in City Manager John Shirey's funding plan.

        Mr. Shirey's plan would require the state and Hamilton County to forgo new sales tax revenues generated by the project so the city could use the money to pay off $88 million in debt for the expansion of the Dr. Albert B. Sabin Cincinnati Convention Center.

        “I'm skeptical of that because it would be very difficult to do that for one part of the state without doing it for the rest of the state,” said Mr. Taft, who was in town for the Midwest Legislative Conference of the Council of State Governments. “Pretty soon, the state has no growth left in its major source of revenue.”

        Since Mr. Shirey's proposal would need a change in state law, the governor's support is crucial.

        Growth in state sales tax revenues helps pay for for public schools and other important statewide needs, he added.

        “If you start carving up and pre-allocating all the growth in the state sales tax, we'll be buying a real financial crisis in the state of Ohio.”

        Mr. Shirey said he still thinks his plan could work if proponents come up with a formula that preserves the “natural growth” in the sales tax that the state uses to fund other needs.

        In addition, Mr. Shirey said state lawmakers could write legislation narrowly so his sales tax financing method wouldn't apply to everyone.

        “Where there's a will, there's a way,” he said.

        Mr. Taft also said “it's hard to imagine how” the state could find capital funds for a direct contribution to the project.

        The state still must come up with $44 million of the $81 million pledged for the county's new football stadium and Reds ballpark, he noted, and there isn't that much state capital money to go around.

        Mr. Shirey's plan also includes $30 million from the state of Ohio over six years. Other funding plans floated by consultants for the project have included the $30 million plus another $15 million in liquor profit bonds to be paid off by the city of Cincinnati and Hamilton County.

        The fact that the city is seeking the state money over six years might make a contribution more palatable, Mr. Shirey said.

        Proponents of the expansion also took comfort in Mr. Taft characterizing the project as “very important” and encouraging them to think creatively about ways the state could try to help.

        “Our challenge is to make the most compelling case locally and regionally for this project,” said Michael Wilson, president of the Greater Cincinnati Convention and Visitors Bureau. “Perhaps there are other ways the state could participate.”

        State funding is one of the last funding elements proponents expect to secure. Mr. Wilson declined to give a deadline for getting a state funding commitment but said he has not given up hope that the state will participate in some way.

        The expansion plan would more than double the size of the city-owned convention center, which proponents argue has lost lucrative convention business because of its relatively small size.

        Already, proponents have lined up $30 million from Delta Air Lines, who has pledged to buy naming rights for the expanded center.

        The airline has not announced a new name for the center. Top officials say they want a name that honors Dr. Sabin, whose oral polio vaccine is credited with virtually wiping out the disease.

        City council also approved a 1.5 percentage point increase in the citywide hotel tax, which is expected to generate enough money to support $17 million in bonds for the project.

        That tax increase will take effect only if proponents for the project can raise $20 million in private contributions by Jan. 1.

        Proponents would like to open the expanded center in 2003.

        While he was in town, Mr. Taft toured the Bengals' $404 million Paul Brown Stadium complex construction site and the city's $206.1 million Fort Washington Way reconstruction project.

        Both projects have gotten substantial dollars from the state, and Mr. Taft said he wanted to see how that investment was paying off.

        After the tours, the governor said he was impressed.

        “As a native son of Cincinnati, it's a lot of fun to come back and see this,” he said.

       

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