Tuesday, October 15, 2002

Cranley questions `double' Metro tax



By James Pilcher
The Cincinnati Enquirer

While some Cincinnati City Council members Monday expressed support for aspects of the $2.7 billion MetroMoves plan, the debate over the city earnings tax is likely to keep council from taking an official stance on the Hamilton County ballot issue.

Councilman John Cranley said he was "adamantly opposed" to Issue 7 unless Metro and its governing board guarantee that the portion of the earnings tax it now receives would be phased out if the ballot initiative is passed on Nov. 5. He got no such guarantee.

"This would provide further disincentive for firms to develop or settle here, because they would be doubly taxed," Mr. Cranley said of a sales tax in addition to the earnings tax. "We would be making it cheaper for firms to settle outside the city and thereby subsidizing our own job loss."

Monday's session of council's community development and intragovernmental relations committee was intended to allow Metro officials to give an "information only" briefing on its plan, which includes a 60-mile, $2.6 billion light rail system.

A half-cent increase in the Hamilton County sales tax would cover the local portion. Proponents say the rest would come from federal and state budgets.

Metro general manager and chief executive officer Paul Jablonski as well as transit board chairman Peter D. Gomsak Jr. outlined the plan. They had support from committee chairwoman Minette Cooper and Jim Tarbell. David Crowley said he liked the plan as a practical matter, but expressed reservations about the financing.

But Mr. Cranley, chairman of council's finance committee, as well as Mayor Charlie Luken, criticized the plan directly, the first time the mayor has taken a stance.

"If I were talking to someone on the West Side, I would tell them that it is not going to happen there," Mr. Luken said. "It is speculation at best that you could tell anybody on the West Side that they would have light rail there in the next couple of decades."

The plan does include a light rail line along Interstate 74 to Dent, but Metro officials have not said when such a line would be built under the 23-year plan.

Mr. Cranley said that he had been negotiating with Metro officials, even before they put the sales tax issue on the ballot, about the local earnings tax issue. Currently, 3 percentage points of the 2.1 percent city earnings tax raises about $38 million annually for the local portion of Metro's annual expenses.

Mr. Cranley promised Mr. Gomsak that if he were to guarantee that the earnings tax would be phased out, he would support the ballot initiative.

Mr. Gomsak said he could not make such a promise.

E-mail jpilcher@enquirer.com



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