Cincinnati's proposed ticket tax hike abandoned, and billboard tax could be next

Cincinnati's proposed ticket tax hike abandoned, and billboard tax could be next
Posted at 1:30 PM, Aug 23, 2018
and last updated 2018-08-23 13:44:00-04

CINCINNATI - A plan to raise taxes on ticket to concerts and sporting events in Cincinnati has been abandoned, and won’t be added to the November ballot.

That’s because no one volunteered to lead the campaign for the new tax levy, and with expected opposition from FC Cincinnati, Cincinnati Bengals and Cincinnati Reds, city council members decided instead to just drop the idea.

“No campaign has been organized so unfortunately, without a campaign, there is no way a tax increase can pass,” said Councilman David Mann. “I’m sure it will be opposed by the ball clubs … so I’d rather do it when folks are united around it, with campaign leadership and money for TV (ads).”

Mann and Councilman P.G. Sittenfeld proposed raising the city’s admission tax from 3 to 5 percent, which would have generated $3.6 million each year to largely fund human services agencies.

They rolled out the idea at a June 21 press conference at the Center for Addiction Treatment - one of the agencies that would have benefited from additional funding. The tax hike would have plugged a deep hole in human services funding that city leaders grapple with each year. It would also have funneled $600,000 annually to neighborhood community councils and the community development corporations for activities such as summer festivals, and to revitalize city blocks and clean up properties.

“It’s a great disappointment,” Mann said.

The deadline to put the tax on the ballot was next week. Mann hopes to try again for the ticket tax hike in 2020, when high voter turnout for a presidential election may help it pass.

This year’s fiscal budget, which city council passed in June, won’t be affected by the abandonment of the ticket tax hike, Mann said.

But Mann worries city council may have a big budget hole to plug related to another tax that may have to be dropped – the billboard tax.

To help balance a $32 million shortfall, city council passed a budget containing a host of taxes and fee increases, including a hefty billboard tax hike to be paid by people who own billboards.

Fee hikes include: $70 to $280 for a construction permit fee for outdoor advertising; $40 to $160 for a permit renewal fee; $50 to $400 for a renewal fee of a sign requiring inspection.

But two of the city’s biggest billboard companies sued, Norton Outdoor Advertising and Lamar Advertising, alleging the city violated the constitutional right to free speech and the tax was unfair.

Hamilton County Common Pleas Judge Curt Hartmann temporarily halted the billboard tax on July 30, saying it is, “a direct tax on the means of engaging in speech. The tax is effectively no different than a tax specifically targeted to being imposed on news print or a print press used to produce newspapers.”

Hartmann will issue a new decision on the billboard tax after a September 7 court hearing. He could stop the city from collecting the tax with a preliminary injunction. This would place the tax on hold until the court case ended, which could be several years.

“Given the judge’s language in the TRO, I would be surprised if he changed his decision at the preliminary injunction stage,” Mann said. “We have a hole in the budget we have to address.”

Acting City Manager Patrick Duhaney estimated the size of that budget hole to be $837,000.

“The administration is seeking direction from the mayor and city council on budget changes to address the FY 2019 budget shortfall,” Duhaney wrote in an Aug. 15 memo. “In the meantime, the execution of contracts associated with the billboard excise tax ordinance will be delayed until the issue is resolved in court.”

Among the projects the tax was to fund was $550,000 for the Center for Closing the Health Gap – a nonprofit that has been at the center of media scrutiny for how it spends taxpayer dollars.

Mann is hopeful that once the final budget adjustment ordinance becomes available in September, it will show the city has extra money to restore funding to those projects.

“There usually is some extra (money) … but there would be a lot of claims on it,” Mann said.