Cutting Tax Rollback Is Best Fix for Stadium Deficit

This isn’t something I say or write often, so please pay attention: Hamilton County Commissioner

Greg Hartmann

is right.

Hartmann, a Republican who currently is president of the county commission, wants to

temporarily keep the existing reduction in the amount of a property tax rollback to avoid deficits in the county’s stadium account

. The deficit is expected to be $14.2 million next year, increase up to $25 million in a few years, and be about $700 million by 2032.

So far, his two colleagues — Republican

Chris Monzel

and Democrat

Todd Portune

— disagree. That means, unless one of them has a change of heart, it won’t happen. Whether Hartmann prevails potentially will affect everyone who lives in Hamilton County, regardless if they own property. I will explain why in a moment.

Under Hartmann’s proposal,

the rollback would be kept at its current level for four years, from 2012 through 2015. That equates to providing about $5 million in tax relief for property owners rather than $19 million

. The latter amount equals 30 percent of all sales tax revenues, which is what was informally pledged to voters in 1996 to help persuade them to approve

a half-cent sales tax increase to build new stadiums for the Reds and Bengals

.

Hartmann’s suggestion is nothing new: He’s following the advice of county administrators who have recommended it before. In fact, Hartmann and then-County Commissioner

David Pepper

, a Democrat, enacted a similar proposal in December 2010 to avoid a deficit this year. At the time, the deal was castigated by conservatives including the

Coalition Opposed to Additional Spending and Taxes

(COAST).

As part of the 2010 deal, the Bengals and Reds agreed to pay rent at the stadiums for the first time. The Bengals agreed to pay $7.4 million over the next five years, while the Reds agreed to pay $2.2 million.

Now Pepper — the commission’s swing vote — is gone, having chosen not to seek reelection. The sole remaining Democrat, Portune, opposed reducing the rollback last time and is especially leery now, as

he will be seeking reelection next year

.

Instead, Portune is pushing the idea of a ballot initiative that, if approved by voters, would add a surcharge to Reds and Bengals tickets so people who actually use the stadiums are the ones that pay for their debt. The amount would be recalculated annually to ensure it covers the next year’s estimated deficit. An Enquirer calculation says the tax would add 44 cents to the price of a Reds ticket and $14 to the price of a Bengals ticket.

That’s an interesting idea and

we credit Portune for his spunk

, but it probably wouldn’t work. Both the county’s lease with the Bengals and the lease with the Reds prohibit a surcharge. The wording in the Bengals lease states, “neither County nor any County Entity shall directly or indirectly impose on Team any sales, services, admission, gross revenues or other tax, assessment, charge, or levy in addition to or in lieu of the Ticket Surtax...”

The surtax refers to the half-cent of the county’s sales tax that goes toward the stadiums. I’m not an attorney like Portune is, but

I’d wager that the provisions about “County or any County Entity” and “directly or indirectly” pretty much scuttles his idea

. It’s time to get serious and consider ideas that will really work.

All this talk of reducing a tax rollback is confusing for the average person. Here’s a simple explanation: Hartmann’s proposed reduction would keep the rebate essentially the same as it was for 2011.

For this year, if the reduction hadn’t been enacted in 2010, a full property tax rollback would’ve provided $18.2 million in tax relief. Instead, it was reduced to $4.7 million. (As a result, the owner of a $100,000 home in Cincinnati got a $15 rebate on his or her property tax, instead of the usual $47.)

Hartmann’s latest proposal would increase the property tax rollback slightly from this year, to $5.5 million. (As a result, the owner of a $100,000 home would get a $17.51 rebate in 2012.)

As part of Hartmann’s deal, although the Bengals and Reds were entitled 

to a total of $23 million for repairs to the stadiums during the next few years, they would agree to just $8 million. Also,

the county would commit its share of casino revenues — estimated at $8.5 million annually — to the stadium fund

, once the casino opens. Further, the property tax rollback would again be tied to sales tax revenues and be increased beginning in 2016.

Over the years, some politicians privately

have called the property tax rollback “a massive tax break for the wealthy.”

Even if you don’t own property, though, the tax break likely affects you negatively because commissioners still have to cover those stadium deficits. And

they do that by cutting other services, like funding for courts and sheriff’s patrols

.

Here’s a little refresher course to explain how we got into this mess for those who weren’t around when it began 15 years ago, or those whose memories have faded with time.

Back in the early 1990s, Bengals owner

Mike Brown

threatened to take his team to Baltimore or another city unless he got a brand new stadium. At the time, the Bengals shared use of Riverfront Stadium with the Reds. Not to be outdone, then-Reds owner

Marge Schott

also demanded a new facility, even though some local officials wanted her to accept a refurbished Riverfront once the football team got its new digs.

After drawn-out political fights about where the Reds stadium should be located and whether commissioners could or should unilaterally raise the county’s sales tax to pay for new stadiums, the matter finally was put before voters in 1996. That’s when

county voters approved a half-cent sales tax increase

that was supposed to pay for the cost of building the new stadiums (or “stadia,” as some persnickety types noted at the time.)

To win approval for the deal, commissioners 

— led by Republican

Bob Bedinghaus

, who now works for the Bengals — made all sorts of promises to voters. Among them,

property owners were promised a break in their property taxes, equal to about 30 percent of all sales tax revenues

collected. Also, the county would

make annual payments to Cincinnati Public Schools

in lieu of the property tax revenue it lost due to the deal.

But sales tax revenues never matched the rosy 3-percent annual growth estimates that Bedinghaus and other supporters said would occur. To make matters worse, Bedinghaus and his crew negotiated a generous lease that gave the Bengals almost anything the team sought, and the stadiums came in over budget

.

Bengals executives have tried to blame the overruns on decisions by Cincinnati and Hamilton County officials to build the football stadium further west than originally envisioned, which caused some delays and higher than expected expenses. 

It should be noted, however, that officials made the shift so they could maximize the economic development potential of the prime riverfront land by adding shops, apartments, condominiums and hotels into the mix. That area — now known as

The Banks

— finally is under construction.

No matter how Mike Brown and Bengals attorney

Troy Blackburn

try to spin it,

it’s the team’s greed that has caused Hamilton County’s dilemma

.

A Wall Street Journal article in July stated

that expenses for the Bengals stadium totaled $34.6 million last year, a sum equal to 16.4 percent of the county budget

. By comparison,

most other publicly financed stadiums have cost-to-budget ratios of less than 2 percent

. Disgusting.

Nevertheless, it’s time that Portune and Monzel stop looking for pie-in-the-sky, unrealistic solutions and get behind Hartmann’s idea. It’s the best one we have.

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