Board and City Exploring New Tax Abatement Agreement
Cincinnati Public Schools’ Board of Education wants to assure that any new tax abatement agreements with the City of Cincinnati give the school district its full share of property taxes.
A 1999 Tax Abatement Agreement is expired December 31, 2019. CPS' primary goal as a new agreement is negotiated is that the district be made whole for the property taxes dismissed by abatements and exemptions, said Dan Hoying, CPS' Legal Counsel.
On May 8, 2019, the CPS Board held a public hearing on the expiring Tax Abatement Agreement.
"The health of the city is directly linked to the health of our public schools," Jones said. "A critical aspect of our long-range financial planning is support of local property taxes….It is our obligation and responsibility to ensure the long-term financial stability of this school district — the largest school district and the 16th-largest employer in our region."
CPS has grown by 4,400 students over the past five years, Jones noted.
- April 27 Board of Education Meeting — Unsigned Tax Incentive Agreement
- Letter to Cincinnati City Council Wednesday, December 18
- Statement from Superintendent Laura Mitchell Friday, December 13
- Background Points about Tax Abatement Impacts
- 1999 Tax Abatement Agreement
Property Taxes Support Public Schools
The issue is how much property tax will be paid by owners of new and existing development and how much of that money Cincinnati Public Schools receives.
Public schools in Ohio are funded primarily through property taxes. As an enticement to developers, city and county governments can offer to abate (waive or cut back) the amount of property taxes owed annually on a neighborhood or a piece of property. Tax abatements are covered under Ohio law as Community Reinvestment Areas (CRAs) and Tax Increment Financing (TIFs).
The 1999 Tax Abatement Agreement took effect when the city and Hamilton County were planning construction of two sports stadiums on Cincinnati’s riverfront.
Hamilton County agreed to contribute an amount equal to the property taxes foregone by exemptions offered on the new stadium properties — then estimated to be around $5 million per year. The city and county also agreed to pay an additional $5 million per year to CPS for capital improvement needs.
The city also agreed to cover the cost of school nurses (provided by Cincinnati Health Department), school crossing guards and school resource officers (Cincinnati Police officers). Due to economic downturns, the city stopped paying for school nurses and crossing guards about 10 years ago, leaving CPS to pick up the costs.
School nurses annually cost CPS about $1.6 million, and crossing guards cost about $700,000 annually.
PowerPoint from May 8, 2019, public hearing — Explanation of 1999 Tax Abatement Agreement and proposed revisions