Creating 'the Cincinnati we all believe in': Why Pureval is backing tax hike

Cincinnati Mayor Aftab Pureval wants to raise the city's earnings tax , a move that would bring in new money to boost development and possibly police and fire services.

But don't ask him to champion a trash collection fee. Free trash pick up is a benefit of living in the city, he said.

Raising the earnings tax and adding a trash fee were two of 25 recommendations made by the Cincinnati Futures Commission , a task force Pureval convened shortly after taking office in 2022 to look at the city's finances with an eye toward fiscal stability and growth.

The commission , led by Procter & Gamble CEO Jon Moeller , issued its report with April 11. Recommendations ranged from sharing services with the county to raising taxes to leasing the city-owned Lunken Airport.

"I am strongly supportive of raising revenue to create the Cincinnati we all believe in for the future.," Pureval told The Enquirer in an exclusive interview. "Traditionally, when we talked about this, the city was reacting to a crisis, reacting to deficits."

Cincinnati City Councilman Jeff Cramerding, chairman of council's Equitable Growth and Housing Committee, was the first from City Hall to seize on the earnings tax increase recommendation as a part of the revenue solution. No other council members have publicly said they would support the idea.

But Pureval's commitment to the idea is notable for two reasons. Council members for the most part support Pureval's agenda and Pureval is fresh off the sale of the Cincinnati Southern Railway, a contentious campaign he fronted last year.

In commercials for the railway sale, Pureval pledged "no new taxes." Of course in context that sale did not raise taxes. But the campaign as a whole was sold to voters as a solution to the city's financial woes. Now, less than a year later, Pureval is suggesting higher taxes.

It also comes two years after Cincinnati City Council raised property taxes, 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.

Property taxes increased from 4.84 mills to 6.1 mills, which at the time cost property owners $39 per each $100,000 valuation of their home. The new millage brought in roughly $15.4 million more a year.

It all comes at a time when Hamilton County property owners are reeling from increased property taxes related to the reappraisal of their homes by the county auditor .

Home values have soared , with overall residential property values jumping 32.7% compared to three years earlier.

Will Cincinnati raise its earnings tax?

The Futures Commission recommended raising the city's earnings tax by 0.15 percentage points, with the increase dedicated to spurring economic growth and boosting public safety. Under that recommendation, Cincinnati's earnings tax would go from 1.8% to 1.95%, which would still be lower than Columbus or Cleveland.

Voters would have the final say about increasing the earnings tax. There was some behind-the-scenes talk of city officials putting an earnings tax on the ballot as soon as this November, but with the deadline looming to put issues on the ballot, there was not enough time.

"I believe residents would bet on the future of this city," Pureval said. "It requires more revenue. This is a conversation that we have to have. I'm grateful to the Futures Commission for calling out what we want to achieve in 10 years."

Cincinnati City Manager Sheryl Long and City Solicitor Emily Smart Woener briefly outlined which of the recommendations they thought were possible during a June 17 Cincinnati City Council Budget and Finance Committee meeting and are working on an in-depth follow-up report.

But Pureval has been mum on what he thinks.

Until now.

In a lengthy interview with The Enquirer, Pureval detailed what he thought about each of the recommendations, which cover a 10-year period. Some need a City Council vote, others a public vote and some are at the discretion of the city manager. She's already working on a few of the recommendations.

For now, here's what Pureval thinks:

Read the report: Cincinnati Futures Commission report

Create a city office of strategic growth

This would involve hiring, with a $10 million budget, three high-level development experts who would work out of the city manager's office. These employees would be in addition to the city's Community and Economic Development department, which has an annual budget of $5.2 million and 38 employees.

Pureval supports this idea. "I have heard consistently that the process − whether it's opening a business or investing in the city − is more challenging than it should be. Having an Office of Strategic Growth that works with DCED will lead to a more efficient process." This would only be created if the earnings tax is raised for a growth fund.

Assess and fix problems in the city's development process

Pureval said the city manager is doing a review now. He expects a report to be given to him and council members, with public discussion of any changes.

Complete an updated land use plan

Pureval called the city's planning department "one of the best planning departments in the nation." Zoning reform known as Connected Communities was a start to this, he said.

" Plan Cincinnati has not been updated in over a decade. Cincinnati is a completely different city, not just because of the pandemic, but because of population growth. It is time to update the land use plan."

The city allocated $250,000 in this year's budget, which started July 1, to support and update Plan Cincinnati, the city’s comprehensive plan which was adopted in 2012. It's in the early stages with planning for the new plan just starting, according to the city manager's office.

Create a $100M sites fund to lure jobs to the city

This money would come from the proposed earnings tax increase.

To accelerate job creation and wage growth in Cincinnati, the Futures Commission recommended the city partner with The Port to identify, acquire, and invest in the creation of development-ready sites.

Pureval said Cincinnati is in the perfect position to become an advanced manufacturing hub. It's already home to prominent logistics companies, Cincinnati has access to rail. And the region has a bustling Cincinnati/Northern Kentucky International Airport.

"It won’t happen overnight," Pureval said. "This is a decades-long strategy. But I firmly believe it is the right one."

Create a $50M neighborhood growth fund

Pureval said this is a natural companion to Connected Communities . This money would empower neighborhoods to spur growth where it's needed. He pointed to College Hill and Walnut Hills , which have strong urban redevelopment agencies, as the model for growing neighborhoods. "This is taking rhetoric and turning it into reality."

Invest $100 million into affordable housing

"Even before this council was elected, housing was an issue," Pureval said. "We have invested millions and millions of dollars into bringing more units to market, but it's challenged by interest rates and it's challenged by construction costs." Pureval says he supports more investment in housing for people making 30% to 60% of the area median income.

For instance, city households earn a median income of $48,130 a year, according to the 2020 U.S. Census. So 30-60% AMI would be a person earning $14.439 to $28,878.

"Without intentional change, we will ultimately be a city where people cannot afford to live, particularly legacy residents," Pureval said.

Put $5 million more into community development agencies

This money is also about neighborhood growth and Pureval supports this investment. The money would go to Homebase, which supports community development corporations, known as CDCs. The CDCs invest in neighborhoods through community building, housing, and economic development efforts.

"Neighborhoods can use this money to get sites under control," Pureval said. "It's an opportunity to invest citywide in neighborhood business districts."

Help Black entrepreneurs with $25M in grants

"I am laser-focused on the disparities that exist in this city," Pureval said, citing the Urban League's State of Black Cincinnnati report released in June.

"A big part of it is about investing in Black business and helping them grow to scale." The money would be given to the Lincoln & Gilbert Fund , which started in 2022 and is designed to double the number of Cincinnati Black-led employee firms in Cincinnati to more than 1,000 by 2027. The initiative is named for the Lincoln & Gilbert intersection of Walnut Hills, the site of the neighborhood's historic, 1840s Black business district.

"We have to be honest: We are still two cities," Pureval said. "We have to help entrepreneurs. It's not just the right thing to do. In order to grow equitably, we have to be focused on portions of the economy that are not doing well. In report after report, the Urban League's and this report included show we are losing the Black middle class. That’s why this is so important."

Increase the earnings tax for development

Pureval supports this idea. But any decision would need support from the business community, he said.

Sell or lease city assets

On this, Pureval said he needs to know more and supports creating a task force to look at the ideas proposed. This includes selling golf courses , turning management of some city parks over to the county and leasing Lunken Airport .

"We need to better understand the revenue streams," Pureval said.

Assess the police and fire departments; modernize billing protocols

Pureval supports this and a study is already underway. The growing population has meant services aren't aligned to where people live now. "We have to put the resources where they are needed." The city is working to better track billing for emergency services.

Increase the earnings tax for public safety

Pureval supports this increase too.

Combine some parks and recreation services

Pureval supports shared services, but while the Futures Commission stopped short of recommending the two departments be combined, Pureval likes the idea.

"There is a natural synergy between parks and rec," Pureval said. "The more we can combine those divisions, the more efficient and effective the services will be, particularly related to teen violence."

Right now, programs are being created in silos, with the departments overseen by two separate boards. Combining the two would require a charter amendment. For now, Pureval said, "It makes sense for us to move in that direction, but that would take a lot more conversation."

Enlist county parks to help manage city parks

If it saves money and if the county parks system is willing , Pureval said he would support the idea. This is already being done at the city's Fernbank Park.

Impose a trash fee

Pureval doesn't support this idea. "We are one of the few cities that doesn't charge for trash removal," Pureval said. "I have personally used large item removal, particularly at Christmastime." But Pureval said, the city does need to seriously look at improving the waste hauling program, composting efforts and increase recycling, all of which would take revenue.

Increase use of data-driven decisions

This is underway. Pureval said the city is working to incorporate analytics into more decision-making, a program which began under former Mayor John Cranley. The city's Office of Performance and Data Analytics is aimed at delivering better, faster, and smarter services to city residents. A team of analysts work with the city’s 27 departments to measure performance, evaluate success, and identify areas for improvement.

Restructure the city's budget

Pureval supports this, but this is a city manager decision and is underway. For years the city has based the current budget on the prior budget without many changes, a process the Futures Commission said results in the city continuing programs or spending that have long since needed "revision or elimination, which can prevent newer, riper needs from being addressed adequately."

In fiscal year 2024, the city began a three-year process of transitioning to a priority-based budgeting. This model prioritizes setting clear measures, service deliverables, and key performance indicators for each department so anything that's not working can be fixed or eliminated in favor of what does work.

'Gainsharing' to help fix the city's outdated fleet

Pureval supports this and it would not be difficult to do. This basically means asking city employees how they think the city could save time and money while updating the fleet.

Transfer the city's pension system to the state

Pureval said he has too many questions about this to take a stance but noted making sure the pension system remains solvent is a high priority. The city is putting more money into the system, but it's not clear if the state would consider taking on city employees to be a good fiscal decision for the state's pension system. "It's important to do right by employees." At the same time, Pureval said the city has to "make decisions for the fiscal health of the city."

Regionalize the city's water system

Pureval supports looking at this idea, but it too would take a lot of study before any decision is made. Things to consider, he said, are doing right by the system's 1,000 employees, understanding if other governments are interested in changing the system's structure (most local governments get their water from Cincinnati), and taking into consideration how "water will be an even more important resource."

Pureval added, "I want to understand what giving up the water system means to the climate and economic strength."

Address deferred maintenance with railroad fund money

Pureval agrees. The city sold its railroad last year and created a $1.6 billion trust fund, from which investment money will be used to address deferred maintenance. The sale was approved by voters before the Futures Commission report was issued so this was already happening via the sale.

Use freed up railroad maintenance money for general operations

Before the city sold the railroad, it spent money money on maintaining it. Now that that expense is gone, Pureval supports putting any savings in the general operating fund.

Redirect Smale infrastructure tax to operating fund

Right now there's a requirement that 0.1% of the earnings tax be used to repair infrastructure. The Futures Commission recommended redirecting the money to the general fund since the railroad fund is predicted to double the amount of money being spent on infrastructure repairs. This would take a citizen vote, but former Mayor Charlie Luken, who is on the railroad board, has been vocal about the railroad money being in addition to , the 0.1%, a talking point during the sale campaign. Pureval said it would take time to "dig out of the deferred maintenance deficit," so now is not the time to do this. But it is something he wants to revisit later.

Impose ticket reselling tax

Cincinnati imposes a 3% tax on tickets to concerts and sporting events, a fee known as the ticket tax. But the tax also applies if an individual resells their ticket to someone else. That fee had long not been collected and meant the city was losing out on that tax revenue. In January, the city began making resale platforms responsible for withholding the appropriate tax on behalf of individuals.

Increase parking enforcement

The city manager proposed this as part of this year's budget and City Council approved the idea. Parking enforcement dwindled after the pandemic. The city is adding four new parking enforcement officers. In other words, there will likely be more tickets.

This article originally appeared on Cincinnati Enquirer: Creating 'the Cincinnati we all believe in': Why Pureval is backing tax hike