CINCINNATI – The so-called worst stadium deal ever struck by a local government got worse Wednesday.
Citing lost tax revenue and fears that a recession could “bankrupt” the stadium tax fund used to pay for Paul Brown Stadium and Great American Ball Park, Hamilton County commissioners voted 2-1 to scale back the stadium property tax rebate (PTR) for 2019.
The rollback will raise property taxes slightly more than $31 per $100,000 value next year, according to commissioner Denise Driehaus. Driehaus and Commission President Todd Portune, both Democrats, voted for the increase.
Driehaus said the property tax rebate would drop from roughly $61 per $100,000 value this year to roughly $29 next year.
Outgoing Commissioner Chris Monzel, the only Republican on the commission, asked the others to keep the property tax rebate flat, citing the fact tax bills will be going up already because of the library levy and others passed in November. Monzel said he wanted to “give residents another year to prepare.”
But Portune said that would put the county’s $30 million reserve fund “in jeopardy, which would put the general fund in jeopardy.”
The county is already looking at a projected $28 million deficit in the general fund next year, officials have said. A proposal to raise the sales tax two-tenths of a cent was withdrawn in August after considerable pushback.
Portune and Driehaus said the rollback was necessary to replenish a $6 million loss from sales tax on Medicare-managed funds that used to go into the stadium tax fund, as well as other lost revenues from the state.
In addition, County Administrator Jeff Aluotto said even “a modest recession” could drop revenue from the county’s half-cent sales tax, passed by taxpayers in 1996, to dangerously low levels. Aluotto and his staff had recommended a bigger cut in the PTR.
All three commissioners criticized the county’s 1996 deal with Bengals owner Mike Brown that left taxpayers on the hook for paying for new stadiums for the Bengals and Reds.
In their 2011 reviews, the Wall Street Journal and Business Report called it the worst stadium deal ever struck by a local government. While agreeing to pay for both stadiums as well as improvements over time, county commissioners had projected a 3 percent annual growth in sales tax revenue. Driehaus called the projection “flawed from the beginning.”
“It’s been closer to 2.1 percent,” she said at Wednesday's meeting.
Hamilton County voters passed the sales tax under pressure from Brown, who threatened to move the NFL team to Baltimore unless he got a new stadium here. That was after the Colts left Baltimore and before the Browns moved there.
To help sway voters, commissioners promised county property taxpayers an annual 30 percent property tax rebate and agreed to a multi-million payments in lieu of taxes to Cincinnati Public Schools.
But Paul Brown Stadium alone ended up costing $459 million, including $51 million in cost overruns. In 2011, stadium costs made up 16.4% of Hamilton County’s budget, according to the Wall Street Journal.
Driehaus excused the current commission’s failure to provide a full property tax rebate next year - 10 percent instead of 30 percent - by pointing out that previous commissions had done the same thing several times.
“We can’t afford for the fund to go bankrupt,” Driehaus said.
Portune insisted commissioners aren’t “withdrawing” from the 22-year-old commitment and promised to discuss “where we go from here, provide stability and reset the way we look at the PTR.”