Tuesday, June 18, 2002

City drops property tax break

Council won't roll back millage

By Gregory Korte, gkorte@enquirer.com
The Cincinnati Enquirer

        Cincinnati residents will likely pay more in property taxes to the city in coming years, as City Council's Finance Committee voted Monday not to roll back the millage rate in next year's budget.

        The decision would reverse a policy in place since 1999, when City Council began rolling back the rate each year so that as property values rose, the tax brought in the same amount of money.

        Rolling back the tax from 5.4 mills to 4.9 mills would save the owner of a $100,000 house $15 a year — and cost the city $3 million at a time when it's facing a $27 million budget deficit.

        The tax debate Monday came as the committee voted 3 to 2 along party lines, with Republicans in the minority, to submit an annual tax budget to the county auditor. Once used to decide how to distribute property taxes to local governments, the tax budget is now mostly a legal formality.

        But the theoretical nature of the tax budget didn't prevent a heated exchange between Republicans and Democrats on the issue.

        “I think most people will see that as a $3 million tax increase,” said Councilman Pat DeWine, a Republican. “Your Social Security check or your income doesn't go up just because your property value goes up.”

        Democrat David Pepper called Mr. DeWine's remarks “silly rhetoric” intended to scare people into thinking City Council is raising taxes.

        And Finance Committee chairman John Cranley called the talk of a tax increase “disingenuous” and “ludicrous.”

        “Mr. DeWine prides himself on being a budget hawk,” he said. “No one who wants to add $3 million to a $27 million budget deficit can call themselves a budget hawk.”

        Mr. Cranley said the $3 million could help pay for the 75 new police officers he's proposed. But if the economy improves and the deficit is erased, the city should give excess property tax revenue back to taxpayers, he said.

        Republican Chris Monzel said the debate over the budgetary impact of the tax is beside the point.

        “The point is, people are leaving the city. We want to promote home ownership. How do we do that? By making it easier for people to stay in their homes,” he said.

        According to it charter, the city cannot collect more than 6.1 mills of property tax a year. But unlike other property taxes such as school and park levies, this “charter millage” is not automatically rolled back as property values rise.

        From 1948 to 1999, City Council took advantage of those increased property values, and property tax revenues grew to $31.7 million. Taxes to the city compose about 15 percent of a homeowner's property tax bill.


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