Cincinnati City Council and the public school board met separately Wednesday to discuss next steps for a 1999 tax abatement agreement set to expire in 13 days. Both agreed on different extension deadlines, effectively negating a new agreement for now.
The main sticking point is how much money developers will pay the school district when they receive property tax abatements. Those are called PILOTs, or payments in lieu of taxes. Right now it's 25-27% of abated property value. The school district wants it increased to 33%. The city and CPS have also struggled to get on the same page on how much the district gets from the state.
The school board voted Wednesday morning to extend the 1999 agreement until Jan. 31.
CPS Board Vice President Ryan Messer suggested the city and board use that time to agree on a neutral expert who understands Ohio's state funding formula and the city's budget to determine what makes the district whole. Messer says the two parties agreeing is the best option, but finding middle ground has been difficult since everyone's looks at the numbers differently.
"What I believe our biggest obstacle is, we're looking through something we believe and the city is looking through what they believe," he says. "I'm not here to say one is right or the other. It's just there, different. Until we get that aligned I don't think we'll do what's best for our city and our children."
City Council voted Wednesday afternoon for a 90-day extension.
CPS Treasurer Jennifer Wagner says a 90-day agreement would make it difficult for the district to create a budget for the following school year and reach its five-year forecast goals.
The city stopped paying for school nurses and crossing guards several years ago, which Wagner says costs the district $2.3 million. The only thing the city is paying for is resource officers.
"The state foundation formula has been ruled unconstitutional four times," Wagner says. "It's already harmed us financially. Last year we lost $5 million because of the cap. We are growing faster than the formula will allow us to grow."
The district said earlier in the day that if the city didn't approve the extension, it would create its own tax incentive review committee to approve each individual abatement. The district is looking to Columbus as a model on how to approve abatements without the city.
At the council meeting, Mayor John Cranley said he "didn't know what to say" about the lack of an agreement.
"The math is that without an agreement, they will get roughly eight cents on the dollar instead of 25 or 27 or 33," he said. "That's cutting your nose off to spite your face. That's the net result of no agreement."