By Debra Jasper
Columbus Enquirer Bureau

COLUMBUS - The Ohio Senate on Wednesday acted to ensure that Cincinnati can use special taxing districts to help pay for key development projects downtown, the riverfront and in city neighborhoods.

Those projects - at least 11 of them, totaling $150 million over 30 years - were in jeopardy because of a ruling by the state tax commissioner requiring everyone in a district to sign off on it.

Among the projects at risk: the riverfront development known as The Banks, and a retail and student housing development in Clifton Heights.

An amendment by Sen. Mark Mallory, D-West End, would reverse the commissioner's decision by clarifying state law on tax-increment financing districts. That amendment was tacked on to a jobs bill that passed the Senate 26-7 Wednesday. It now goes to the Ohio House.

Here's how the taxing districts work: As property values rise, the added tax revenue, or increment, is paid into a special fund that pays for the capital improvements. Those projects, in turn, contribute to the higher property values.

City officials had said development projects from the riverfront to Bond Hill were in trouble after Ohio Tax Commissioner William W. Wilkins interpreted state law earlier this month to require every property owner to agree to be placed in a tax-increment financing district.

With 11 districts of almost 300 acres each, Cincinnati City Council member John Cranley and others said getting that many signatures would have involved thousands of property owners and been impossible to pull off.

Cranley, who led the effort to create the 11 districts in 2002, said he now hopes the bill will move quickly through the House so key projects won't be delayed.

Since the districts don't require a direct tax increase, he said, it shouldn't be necessary to get the signatures of every property owner. "These aren't tax increases, they just a guarantee that tax dollars are spent in neighborhoods," he said.

He and other city officials said the taxing districts help tremendously because they allow the city to invest in improving areas, increasing property values and pushing up property tax revenue. The additional taxes brought in can be used to pay off the initial investment.

Mallory said the amendment was inserted, in part, to protect Cincinnati's citywide Community Reinvestment Area Program.

"This is meant to bring investment to the urban core of the city," he said after the bill passed. "The more people we get to build homes in Cincinnati, the more easily we can increase the tax base and improve our economy."

The jobs bill, which now goes to the Ohio House for a vote, allows tax abatements - for remodeling or building new homes - inside tax-increment financing districts. The tax commissioner had ruled that the two tax incentives were incompatible under existing law.

Mallory also successfully pushed through another amendment to the jobs bill on Wednesday authorizing the state to sell the building at 1916 Central Parkway to Hamilton County for $300,000. His office said the county plans to use the building as a one-stop employment center, providing a centralized office for the region's unemployment services.

E-mail djasper@enquirer.com