When I served on City Council from 2013 until 2018, I was amazed at the number of development deals coming before City Council for incentives compared to other legislation. I learned that much of what City Council does on a weekly basis is approve specific incentives for transactions or review and revise existing city laws to make sure that the laws are not interfering with the development of our city. This is not a bad thing. Development is essential, not only for our city to thrive but also just to survive.
In this Council election cycle, some are arguing that too much emphasis is placed on development. I say that is nonsense. Cincinnati is an older city that grew and expanded in the 19th century, before the days of city planning. Much of our infrastructure is dated and crumbling and needs to be replaced. If we do not re-develop our city, it will die. New development is essential to growth, and growth is essential to providing the necessary tax base for all the things the city does. Our Public Services Department maintains our streets, keeping the them snow free in the winter and pothole free in the spring. Our Parks Department and our Recreation Department provide activities in world-class public spaces and make Cincinnati a great and enriching place to live. And our police and fire departments keep us safe.
For our city to provide these necessary basic services and more, we need tax revenue.
The vast majority of our operating budget is paid for by the city earnings tax. Property taxes, for example, account for 7.4% of the city's general fund revenue. The earnings tax, by contrast, accounts for 70.7%, more than 10 times the revenue collected in property tax. Because the city relies so heavily on the earnings tax, it is essential to attract wage earners with high annual incomes to live and work in Cincinnati.
Construction of a new building in the City of Cincinnati is much more expensive and difficult than constructing that same structure outside the beltway. Development in the city requires sophisticated negotiation of incentives that is beyond the understanding of most members of City Council. These negotiations should be left to the Community and Economic Development Department, with City Council providing necessary oversight. Neither Council members nor the Mayor should put their finger on the scale to the benefit of one development over another. City Council and the Mayor should set the policy by which the incentives are given, and these incentives must be tied to the amount of new revenue that will benefit the city.
Development and developers should be welcomed in our city; not shunned, not used to extract funding for other purposes, and certainly not extorted for personal gain.