Cincinnati teachers to city: Tax breaks costing schools $8.4M. Stop giving so many of them.

Cincinnati Public Schools' teachers union has a message for city officials: Stop giving so much money away to developers.

In a letter to Cincinnati Councilman P.G. Sittenfeld, union President Julie Sellers said the city’s history of tax abatements, which is the temporary reduction or elimination of property taxes, is hurting Cincinnati schools. She says CPS is losing out on $8.4 million a year even considering $5 million the city pays the district to compensate for the tax breaks.

Sittenfeld's Education Innovation and Growth Committee is looking at the issue.

“Tax abatements may be a useful tool to encourage development in blighted neighborhoods, or during an economic downtown,” Sellers wrote. “But the city’s ongoing grant of lengthy abatements in thriving neighborhoods shortchanges our schools and local services.”

Other local services supported by real estate taxes – such as the Cincinnati Zoo & Botanic Garden, children’s services and health care for the poor – are losing an additional $10 million a year as a result of the tax breaks, according to the union's analysis of city and county records.

The tax breaks are also causing problems for homeowners and businesses across the city, according to Sellers.

A large portion of the tax breaks has gone to growing neighborhoods like Hyde Park and Mount Lookout, which together received about 20 percent of all residential abatements. Many residents in those neighborhoods are unhappy because the tax cuts for new construction are encouraging teardowns and subdivisions.

Also, owners of older homes and businesses shoulder more of the tax burden when the owners of new and renovated properties pay less, Sellers noted.

In 1999, the city agreed it would give CPS $5 million a year to offset the cost of the tax breaks to the schools. That agreement expires next year, and Sellers says the union's findings show the importance of renegotiating the amount.

The teachers union is asking council for four changes:

Increase annual payments form the city to CPS from $5 million to “an amount that will cover CPS’s lost revenue from current abatements."

Limit new abatements to struggling neighborhoods that need new investment.

Stop giving tax breaks in thriving neighborhoods like Hyde Park and Mount Lookout.

Reduce the length and percentage of any new abatements.

The committee discussed the 1999 abatement agreement with the CPS school board Tuesday, the first step in what's likely to be a lengthy process.

After the meeting, Sittenfeld said he's glad the city and CPS are working collaborative and getting an early jump on the issue.

"Over the next year, we'll work on forging an agreement that hits the sweet spot for maximizing positive development in the city," Sittenfeld said, "which in turn maximizes new revenue going toward our schools."