An amendment to the Charter of the City of Cincinnati to phase out and repeal the tax on real and personal property in the City.
Be it resolved by the people of Cincinnati that Section 3 of Article VIII of the Charter is hereby repealed and replaced with the following text
Section 3. Consistent with the provisions of this Article, the council may annually levy a tax for current operating expenses on the real and personal property in the city for the purposes of the City of Cincinnati, its boards, departments and institutions. Beginning with the 2006 tax year, the maximum allowable rate of such tax shall not exceed four (4) mills on the dollar of assessed valuation. Thereafter, the maximum allowable rate of such tax. shall be reduced by five tenths (0.5) mill per year, until the property tax has been reduced to zero (0) in the 2014 tax year.
SHALL EXISTING ARTICLE VIII, SECTION 3 BE REPEALED IN ITS ENTIRETY, AND REPLACED WITH THE ABOVE TEXT?
- What the Amendment Would Do: This issue proposes to amend the Taxation
and Finance article (Article VIII - Section 3) of the Charter of the
City of Cincinnati. If passed, the amendment would, over the next nine
years, reduce and phase out the property tax that the City Council
levies for current operating expenses of the City of Cincinnati, its
boards, departments and institutions.
- Explanation and Background: This proposed Charter amendment, beginning
with the 2006 tax year, would reduce the maximum allowable property tax
rate for general operating purposes to 4.00 mills. In succeeding years,
the maximum allowable rate of the property tax would be reduced by five
tenths (0.50) mill per year until the property tax rate has been reduced
to zero (0) in the 2014 tax year. The City property tax on real and
personal property would be eliminated over the coming decade and
thereafter Council would be prohibited from levying any property tax for
current operating expenses.
- At the present time, the Charter of the City of Cincinnati authorizes a
property tax levy up to 6.1 mills on the dollar of assessed valuation
for current operating expenses. The City Council sets the rate annually
in the fall. Currently the rate is 4.98 mills on the dollar of assessed
valuation. The property tax along with City income tax, state shared
revenues, and investment earnings are the major components of the City
General Fund providing approximately 86% of General Fund revenues. The
General Fund property taxes, accounting for approximately 9% of the
General Fund, are levied on real property, public utilities and tangible
personal property. Real property consists of residential, agricultural,
commercial and industrial land and buildings. Personal property is
equipment, machinery and inventory of businesses. The General Fund
provides for general government operations such as police and fire
services, health clinics, solid waste collection, parks and recreation,
and building code enforcement among other operations.
- In 2005, General Fund Revenues are estimated to be $318 million and
Property Tax revenues for current operating expenses are estimated to be
$29 million. The City Property Tax millage for current operating
expenses amounts to approximately 7.8% of the total property tax paid by
- The city property tax is collected by Hamilton County along with all
the other county and school property taxes. The City property tax
portion is returned to the City. If passed, this amendment would affect
only the portion of property taxes which a city resident pays to the
city for current operating expenses. A city resident would continue
paying property taxes to the City for debt service and related costs on
bonds and notes and to the School District and to the County for special
levies and general purposes.
- A similar amendment was proposed by initiative petition, voted on in
November, 2004, and did not prevail.
- Those in favor say:
- This amendment would impose fiscal discipline on City Council so that
Council would not spend too much money.
- People are leaving the City because property taxes are too high.
- Those opposed say:
- It is fiscally imprudent to roll back property taxes to zero without
any plan to replace the lost revenue from the property tax.
- This Charter amendment would take away the flexibility of City
Council to set property tax rates according to budget revenue needs.
- This information was prepared by the League of Women Voters of the Cincinnati Area. September 2005.
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- City of Cincinnati