By Gregory Korte
The Cincinnati Enquirer

Many challengers for Cincinnati City Council have criticized the current council's decision to give $52.2 million in grants and tax incentives to the Convergys Corp. to stay downtown.

All but a handful, however, say they would put together similar deals to attract and retain downtown businesses.

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As City Council is increasingly asked to subsidize downtown businesses - either through tax breaks, direct cash grants or improvements like parking - economic development in the city often turns on how much the city is willing to pay for it. The 39th City Council - to be elected Tuesday and sworn in Dec. 1 - will likely approve a comprehensive policy on how to use development incentives.

Job creation tax credits, which refund to the company the earnings taxes paid by its employees, were a central part of both proposed incentive packages to Convergys - one proposed by Mayor Charlie Luken and City Manager Valerie Lemmie and the other by Democrat David Pepper and Republican Chris Monzel.

The Pepper-Monzel plan also included $29.8 million in cash grants, financed through a special downtown property tax fund. In July, City Council approved that plan, 8-1.

That one "no" vote came from Democrat Alicia Reece. But even she said she would support the use of job creation tax credits on a "case-by-case basis."

"I just think there needs to be better oversight," she said.

Many candidates say it's perfectly appropriate to use incentives for downtown businesses - as long as the city gives equal treatment to small, neighborhood businesses.

Among them: independent Damon Lynch III, whose campaign rhetoric has had a distinctly anti-downtown ring. He said incentives should be targeted toward creating jobs for those who need them.

"If we give subsidies to major corporations, they need to give jobs to people in the city - not the suburbs," he said.

Charterite Nick Spencer is a leading critic of the Convergys deal. To him, the problem was the company, not the incentives. Convergys has already laid off 40 people since the vote and expects to lay off even more after the election.

"I still believe that local and state job creation credits can be a useful economic development tool, when applied reasonably and responsively," he said.

Democrat Samuel T. Britton complained that Convergys almost immediately opened call centers in the Philippines and hired 3,000 people overseas.

Among those who oppose all tax credits was Charterite John Schlagetter, who favors an overall reduction in the city tax rate to encourage homeownership and business investment.

Charterite Christopher Smitherman, a financial planner, said he's categorically against "corporate giveaways." One recent Smitherman campaign commercial suggested that Convergys ought to register with the city as a panhandler. "It's important to keep corporations downtown. But huge corporate giveaways aren't the way to do it," he said in the campaign ad.

What they said

The Cincinnati Enquirer asked all 26 candidates for Cincinnati City Council: "Should the city continue to use job creation tax credits - up to the maximum amount allowed by state law - to keep and expand downtown businesses?"

Yes

Samuel T. Britton (D), Laketa Cole (D), John Connelly (R), John Cranley (D), David C. Crowley (D), Terry Deters (R),

Pat DeWine (R), Leslie Ghiz (R), Glenn O. Givens Sr. (I), Marilyn Hyland (I), Tom Jones (R), Damon Lynch III (I),

Sam Malone (R), Chris Monzel (R), David Pepper (D), Alicia Reece (D), Nick Spencer (C), Jim Tarbell (C), Barbara W. Trauth (R), Eric Wilson (I).

No

Larry J. Frazier (I), Brain Crum Garry (I), John Schlagetter (C), Christopher Smitherman (C), Pete Witte (R).

Unsure

Howard H. Bond (D).

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E-mail gkorte@enquirer.com