December surprise: Cincinnati City Council set to raise property taxes

Cincinnati City Council on Wednesday is set to raise property taxes in Cincinnati, rolling back a more than two decades-old promise of keeping property taxes that fund the city's operating budget at an amount that brings in roughly $29 million a year.

On Monday, Council's Budget and Finance Committee voted 6-2 to raise property taxes from 4.84 mills to 6.1 mills, which would cost property owners $39 per each $100,000 valuation of their home. The new millage would bring in roughly $15.4 million more a year, city officials said.

Cincinnati Mayor Aftab Pureval, as do seven Democrats, supports the plan, meaning it's all but assured that the tax increase will pass. On Monday, council members Democrat U.S. Rep.-elect Greg Landsman and Liz Keating, council's lone Republican, voted no. Vice Mayor Jan-Michele Lemon Kearney attended the meeting remotely and could not vote.

Pureval, in a memo, said he'd like to see the money spent on emergency rental assistance, code enforcement and youth jobs, including raising the pay for lifeguards. The city has struggled to hire enough lifeguards to open all of the city's 23 pools. The money will target "bad-acting" out-of-town landlords, Pureval said.

"I don't come before council with the perspective this is an easy decision," Pureval said. "This is a hard decision. But this is an important decision."

The decision comes on the heels of an unprecedented $85 million carryover budget this past fall, meaning the city had $85 million left over from its fiscal year 2022 budget. At the time, city administrators said the surplus was the result of not all the federal stimulus money being spent, plus higher-than-expected income tax collections.

The decision comes as Hamilton County Commissioners consider raising sewer rates by 3%.

City Manager Sheryl Long, who recommended the property tax increase, warned in a memo that deficits loom due to employee raises and less income tax coming in due to remote work. American Rescue Act money from the federal government has been propping up the operating budget since the pandemic hit in 2020, but that money will run out in fiscal year 2026.

"Especially coming out of Covid we realized the volatility of our income tax," Long said Monday. She likened it to people forgoing "one cup of coffee shop coffee per day" to do "amazing things."

"Sometimes we have to eat the vegetables," Long said.

Pureval spoke at the hearing. "I'm here because of how important this is. The fiscal challenges we all face is substantial. This is a very challenging time for the city." Pureval recently convened a commission, led Procter and Gamble CEO Jon Moeller, of business and community leaders to review the city’s budget and make recommendations about future spending.

Keating pointed to the broader economic situation as a reason against raising taxes.

"Yes, we need to diversify our revenue, but not at a time when we have a surplus from stimulus dollars and when Cincinnatians are hurting from inflation and the bad economy," Keating said. "This is going to hurt the people struggling to make ends meet."

Monday's presentation of the plan was considered a public hearing. The resolution was brought forward for emergency passage, with a vote happening two days after publicly announcing the idea. The tax budget is not due to the state until Jan. 20.

Cincinnati City Council in 1999 decided not to raise property taxes, putting in place what is referred to in City Hall as the property tax rollback. City managers have argued for years the rollback was supposed to be temporary.

This article originally appeared on Cincinnati Enquirer: Cincinnati City Council set to raise property tax