CPS to challenge Convention Center retroactive tax exemption

CINCINNATI, OH (FOX19) - The Cincinnati Board of Education has authorized Cincinnati Public Schools to pursue legal action to challenge a provision in the state budget bill that retroactively exempts the City of Cincinnati from paying taxes owed on the Duke Energy Convention Center.

A city spokesperson says when the city expanded and renovated the convention center in 2006 they brought in professional management to help with convention business. Previously, the convention center had been fully staffed by city employees. More than four years later the city received a letter from the state saying the convention center was no longer tax exempt. Three months after that, the state put a new provision in their budget allowing the convention center to return to tax exempt status.

The provision circumvents a ruling that the city owes approximately $11.9 million in back taxes, including more than $7 million to CPS.

"It is our responsibility to ensure that our students receive all the resources to which they are entitled, and that is why we are pursuing legal action," said superintendent Mary Ronan.

"It's very difficult to put a levy on the ballot in this dreadful economic time," Ronan went on to say. "We're struggling with that while everyone else is basically stealing from us."

Ronan believes governmental agencies and utilities are balancing their budgets on the backs of the Cincinnati public school children.

The city argues, however, it was never CPS's money to claim in the first place.

"CPS did think for about three months they might have some claim to some money, we've never contended that," City Spokesperson Meg Olberding said.

"This is money that CPS has never gotten from the city, its money that they have never counted on in the past and it is not currently in their budget," she explained.

Even more, Olberding says the city simply would not have the money to pay the back taxes.

"It would have a major impact on our convention center," she said. "It could really be the closing of the center."

Last March, when the Ohio Department of Taxation ruled that the city was not exempt from taxes on the Convention Center, the city filed an appeal on the ruling, claiming it could not afford to pay the bill.

Ronan says attempts to meet with city representatives of the city to reach an agreement that would work for the city and the school district were unsuccessful.

"Without notice to us, the city inserted two short paragraphs into the budget bill to exempt the city form paying taxes on the Convention Center, not just going forward, but retroactively, which we believe to be illegal," said Ronan.

The bill states, "a convention center owned by the largest city in a county...regardless of whether the property is leased to or otherwise operated or managed by a person other than the city."

Ronan says the budget bill provision comes on top of a series of revenue reductions and cost-shifting losses to CPS, reaching $54 million by 2015.

She says from last school year to this school year alone state funding to CPS has declined by 18 million dollars. By fiscal 2015 the projected annual loss of state funding will reach 44 million. Ronan says the county's land bank has reduced property tax revenues by one million dollars annually.

She added that he city has stopped funding crossing guards, reduced funding for school nurses and says it now appears they are ready to end that funding entirely.

CPS has not taken any legal action yet. A spokesperson says they are still in the process of finalizing their legal counsel after which they will decide the best way to challenge the provision. Potentially it could become a case in common pleas court.  In the meantime, they say they would be open to talks with the city to come up with a compromise. The city, however, says it is an issue between CPS and the state.

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