Tuesday, October 2, 2012

Winburn proposes $175M fund to create jobs, reduce deficit

Cincinnati City Council Job Growth Committee Chair Charlie Winburn has presented a proposal to use all of the proceeds from Horseshoe Casino Cincinnati to fund a revolving economic and neighborhood development job fund, which he says will help eliminate the City's estimated $40 million general fund deficit and move its pension system toward solvency.

Winburn wants Council to approve a third-party cost-benefit analysis of investing $14 million in projected annual casino revenue over a 20-year period to purchase and fund taxable bonds, leveraging $175 million in upfront funding that he says can be used to generate a 3-to-1 return on investment.

Under his proposal, the fund would be allocated in the following percentages:

  • 25 percent to promote small businesses, mid-sized companies, and large corporations;
  • 25 percent to promote Downtown development and startup accelerator Cintrifuse;
  • 25 percent to promote community and neighborhood development projects in all 52 neighborhoods, utilizing workforce development initiatives and partnerships with local colleges and universities;
  • 15 percent to attract companies to move their headquarters to Cincinnati; and
  • 10 percent for the Port of Greater Cincinnati Development Authority to grow business.
In a statement accompanying the proposal, Winburn said that the new net jobs – combined with a City spending caps and cuts to City departments – would eliminate the deficit, improve the City's bonding rating, and make Cincinnati more attractive for national and global investment.

"The City Council can allocate this money on pet projects like it did with the $55 million Anthem funds several years ago or it can use these funds to leverage the economic future of the city," Winburn said.

The study, which would be conducted by the University of Cincinnati Economics Center at a cost of $12,500, could be completed by the end of November. Private sector support would be sought to fund the study.

A motion approving the study is not yet on Council's agenda.

On September 18, Economic Development Director Odis Jones presented his own proposal to use $4 million in annual casino revenue to build a $61 million loan pool to finance projects by the Port Authority, Cincinnati Center City Development Corporation (3CDC), and community councils. An additional incentive, which he called a "game changer", would allow companies willing to invest more than $100 million or bring 2,000 or more jobs to the City to avoid City taxes for five years, or enjoy a 50 percent reduction in City taxes for ten years.