Mayor looks to revisit' abatements
Questions perks for homeowners, firms

Wednesday, February 22, 2006

Susan Vinella
Plain Dealer Reporter

Mayor Frank Jackson wants to take a closer look at Cleveland's residential tax abatement policy, which relieves buyers of new homes from paying property taxes for up to 15 years.

The policy, which must be renewed by City Council every two years and approved by the state, comes up for review next year.

The mayor asked council Tuesday to work with him to re-examine the residential policy as well as commercial tax abatements, which the city grants on a project-by-project basis.

"My approach is we shouldn't have to bribe somebody to come to Cleveland," Jackson told council during hearings on the city's 2006 budget.

He said city schools need money and Cleveland can't continue to forgo taxes from development.

In an interview later, Jackson backed off a bit and said he had "no feeling yet" on whether the city's tax abatement policies should be changed but added, "I just know we have to revisit it.

"The question is: What is the level of abatement needed to allow for development?' " he said.

Jackson spent more than two hours before council discussing the city's finances and his strategy to shore them up.
He proposed an operations budget of $503.5 million this year, an increase of $26 million from last year.

He told council he put aside no money for street resurfacing, a contrast to the more than $3.6 million set aside in 2005.
Jackson said he is working on a five-year plan of capital improvements -- such as roads, parks and other buildings -- and a long-term strategy to create jobs.

Councilman Zack Reed said a new convention center could draw people downtown and boost the city's economy.

Jackson said a single major project, such as a convention center, won't solve the city's economic problems.

It should be considered as part of an overall plan, he said, or, "We're gonna wind up with a beautiful building that we don't have the money to operate."

The mayor pointed out that development projects aren't a focus for him now.

"If we are project-driven, then we're politically driven," he said. "Our future survival depends on fiscal stability."

Several council members asked about the city's new red-light and speed cameras. Jackson said all of the cameras -- 30 to catch red-light runners and 12 to snag speeders -- are expected to be working by April 19.

That is about two months behind schedule.

Six red-light and two fixed speed cameras are operating now, in addition to six mobile speed units. Jackson expects the city to earn $6 million in fines from the cameras this year.