Race and Income Bias Also Evident in Hamilton County
Tax abatements of at least three kinds have cost Cincinnati Public Schools (CPS) $80.9 million since 2017. Both absolutely and on a per-student basis, CPS losses are greater than those of the eight largest suburban school districts in Hamilton County.
Cincinnati’s Residential Tax Abatement program is the city’s costliest, at $41.5 million since 2017. Tax increment financing (TIF) is second costliest at $28 million, and Community Reinvestment Areas (CRA) have cost $11.4 million. Despite its high costs, the Residential Tax Abatement program has not been correctly disclosed by CPS.
Among all nine school districts, there is a clear pattern of discrimination by race and income. The three school districts that are majority-students of color (Cincinnati, Winton Woods, and Princeton City) all lose three to 23 times more per student than the six majority-white districts. Those same three school districts also are the poorest: most of their students are eligible for Free or Reduced Priced Meals.
Those are major findings contained in a study released today by Good Jobs First, a non-profit, non-partisan group that tracks economic development incentives. The study was commissioned by the Cincinnati Federation of Teachers.
The other six school districts examined are Northwest Local, Oak Hills Local, Forest Hills Local, Sycamore Community City, Southwest Local, and Loveland City.
- Read the full report.
Cincinnati’s residential tax abatements for residential construction, which are unusually generous, have been criticized for disproportionately benefitting affluent, white neighborhoods, and contributing to segregation. Money that would otherwise be going to schools, roads, parks, mental health services, and other public goods is instead kept by high-income households who enjoy a boost in home values.
The district’s $28 million loss to TIF represents increased property tax revenue from new development or redevelopment that rather than going to the school district, is diverted to fund these new developments. Instead of receiving the tax revenue, the district receives Payments In Lieu of Taxes (PILOT) to offset their losses, but as shown in this analysis, those payments do not fully cover the revenue lost to TIF.
The district also lost significant funding due to the state-enabled CRA program, which gives tax breaks to property owners who renovate existing property or construct new buildings in certain areas. These breaks can cover up to 100% of property taxes and last up to 30 years. CRAs are the most common type of tax abatements in Hamilton County, eight of the nine districts analyzed reported CRA revenue loss.
This analysis was made possible by a major government-accounting reform. Governmental Accounting Standards Board (GASB) Statement No. 77 on Tax Abatement Disclosures requires most state and local governments, including school districts, to report how much revenue they lose to tax abatement programs.
“School districts in Ohio rely heavily on property taxes,” explained Greg LeRoy, executive director of Good Jobs First. “So property tax abatements place a greater burden on residents and small businesses, which must make up the difference with higher taxes, or poorer public services, or both.”
Read the full report (PDF).
Editor’s note: For more on GASB Statement No. 77, go to https://goodjobsfirst.org/tax-abatement-disclosures/