Many of Cleveland and Cuyahoga County's taxes are maxed out under state-imposed limits, as local leaders weigh two requests for publicly-financed stadiums. John Pana, cleveland.com
CLEVELAND, Ohio – Cleveland Browns owners Jimmy and Dee Haslam have put their hands out for up to $1.2 billion from state and local taxpayers for a new or renovated football stadium, and they’re not the only ones looking for public money to build such facilities. Cleveland Soccer Group last week also went public with its request for $90 million in taxpayer funds for a new $150 million stadium as part of its efforts to lure a National Women’s Soccer League team to Cleveland.
Backers of these projects have been short on details about where they expect taxpayers to find the cash. But Cleveland, Cuyahoga County and the state most certainly want to know, given the intricate ways local tax dollars have been assembled over decades to cover the ever-growing cost of public services that government must fund.
Representatives of the Browns, in recent months, have been meeting with members of the Ohio legislature in hopes of securing state contributions to a renovation of city-owned Browns Stadium in Cleveland, which they’ve pegged at $1 billion, or to build a new domed stadium in Brook Park, which they say would cost $2.4 billion. Under each option, the Haslams want the public to pay half, with the state and local governments each kicking in millions.
Meanwhile, the Cleveland Soccer Group is also seeking a combination of money from city, county and state governments, paid, in part, through admissions taxes at their future facility and public revenue bonds — funding sources that, backers argue, would only exist if their stadium gets built. But they have yet to provide evidence that those sources would be enough.
In a region with countless pressing needs and already-high taxes, the prospect of publicly financing either project begs the question: Where will the money come from?
Cleveland and Cuyahoga County largely rely on income taxes and property taxes for the bulk of routine government services, like policing and the social safety net. Local leaders are loathe to siphon off large chunks of this revenue for a football stadium, and Mayor Justin Bibb has outright pledged to protect the city’s general fund against stadium financing requests.
But a host of other oddball local taxes have been ripe for the picking on past stadium deals or other large-scale specialty projects.
We’re talking sales tax, bed tax, sin and cigarette taxes, and others levied in Cleveland for admissions, car rentals and parking.
In Cleveland and Cuyahoga County over the years, local leaders have steadily maxed out many of these tax rates under state-imposed limitations, meaning it would take an act of the legislature to allow Cleveland and Cuyahoga County to push them even higher, or change how the revenues can be used.
Luckily, even if the state were to enable higher caps on these taxes, raising the tax rates locally has always required the consent of Cleveland or Cuyahoga County leaders – or the taxpayers, themselves.
Maxed out, unless state acts:
Among the examples of maxed-out local taxes are Cleveland’s 3% bed tax and $6 car rental tax, which Ohio law doesn’t allow to go any higher. These taxes can generally be used by the city for any lawful purpose. The mayor and city council authorize them, so they’re not subject to a vote of the people. The car rental tax was passed by City Council in 1995 and used to help fund construction of the existing football stadium.
Likewise, the county’s voter-approved excise tax on alcohol and cigarette sales, known as the sin tax, is also maxed out under state law. This is the only source of local revenue that is exclusively set aside for Cleveland’s three professional sports stadiums. These taxes equate to 4.5 cents per pack of cigarettes, 1.5 cents per 12-ounce bottle of beer, 6 cents per 750-milliliter bottle of wine, 32 cents per gallon of mixed beverages, 24 cents per gallon of cider and $3 per gallon of hard liquor. The state-imposed caps on these rates have remained unchanged since the 1990s and do not apply to vaping products.
Cleveland’s parking tax – levied at 8% for public paid parking lots – was established in 1995 through a vote of City Council and was a major piece of the puzzle in funding the construction of the existing stadium. An Ohio law passed that same year placed the cap at 8%, which remains in place today. State law does not limit what that money can be used for.
For most intents and purposes, maxed out:
The county bed tax, at 6.5%, is also realistically maxed out under state limitations, according to the county. The generic state-imposed cap is 6%. Cuyahoga County – and other large counties across the state – exceed that cap in various ways, thanks to numerous exceptions and carveouts allowed by the state over the years for special purposes. Cuyahoga County can exceed the cap due to a vote by the commissioners in the 90s that took advantage of a brief window to impose a 1.5% increase for the Rock and Roll Hall of Fame. State law requires most bed tax proceeds to be set aside for convention centers and visitors bureaus, though a portion of the money flows to the general funds of the county and cities and can be used for capital upgrades.
The county’s standalone cigarette tax, which is exclusively used to support Cuyahoga Arts & Culture, is currently at its state-imposed limit of 30 cents per pack. But it could theoretically go higher if local leaders scrap the current tax and seek voter approval for a new one. Under a relatively recent state law change, any new cigarette taxes for arts and culture can exceed 30 cents per pack.
Possible wiggle room:
Cleveland’s admissions tax for theater performances, professional sports games and other events that charge admission sits at 8%. State law didn’t explicitly provide for the admissions tax prior to 1998, but now, it limits such taxes to 10%, according to the Ohio Department of Taxation. State law does not dictate how cities are allowed to use the proceeds. Cleveland first enacted a 6% admissions tax in the 1970s but bumped it up 8% in 1995, so it could use the extra money to help pay for construction of the existing football stadium. This tax require approval from the mayor and city council, but not voters.
The county’s 8% sales tax brings in much more revenue than these other local taxes and is a vital contributor to the county’s general fund, alongside property taxes. Of the 8%, 5.75% goes to the state, 1% feeds routine county services, and the Greater Cleveland Regional Transit Authority receives 1%.
The 8% rate also includes a recent extension of the county’s quarter-percent sales tax that’s largely intended for the construction of a new jail. But Cuyahoga County could still raise the sales tax an additional quarter-percent under current state law.
Such an increase would not necessarily be subject to a vote of the public. But Cuyahoga County already has the highest sales tax rate in the state, and local leaders are not keen on pushing it even higher. County Chief of Staff Erik Janas recently said he has already warned the Browns not to come knocking for such an increase.
EDITOR’S NOTE: This story has been updated to clarify that the Cleveland Soccer Group hopes to fund its proposed stadium, in part, with public sources that would only be created if the stadium gets built.
If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement and agree that your clicks, interactions, and personal information may be collected, recorded, and/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.
Use of and/or registration on any portion of this site constitutes acceptance of our User Agreement (updated 4/18/2024), Privacy Policy and Cookie Statement, and Your Privacy Choices and Rights (updated 12/31/2023).
Cookie Settings/Do Not Sell My Personal Information
© 2024 Advance Local Media LLC. All rights reserved (About Us).
The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Advance Local.
Community Rules apply to all content you upload or otherwise submit to this site.
YouTube’s privacy policy is available here and YouTube’s terms of service is available here.
Ad Choices

source