Streetcar Funds Cannot Be Used for Operating Expenses

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Q: The City of Cincinnati will be using Capital Funds to construct the streetcar. Can the City of Cincinnati use Capital Funds to pay for operating expenses, such as city employee’s salaries?

Lea Eriksen, City Budget Director

A: The sources of funding for the City’s General Capital budget include a dedicated portion of City’s Income Tax (0.15% of the 2.1%), a dedicated portion of the City’s Property Tax (5.36 mills out of 9.89 mills), and lease payments from the City owned Southern Railway.   All of these sources are restricted by City Charter and/or State Law to be used for “permanent improvement” purposes.  A permanent improvement is defined as an asset with a useful life of at least five years and a value of at least $10,000.   The City can not by Law use the funds from the General Capital budget to pay for operating expenses such as Police Officer salaries.

4 thoughts on “Streetcar Funds Cannot Be Used for Operating Expenses

    t-storm said:
    November 19, 2010 at 12:26 pm

    Derrrrrr….but the streetcar will only be around for 1 year after no one rides it….derrrrr


    […] the fact that the city’s capital funds (from which the streetcar construction is being paid) cannot be used for operational expenses such as police and fire protection. No amount of “but it’s all taxpayer money” […]

    metro | cincinnati : Monkeys on our Backs said:
    February 8, 2011 at 6:50 am

    […] shifted toward operational expenses for public safety. This ignores the much-overlooked fact that capital funds cannot be used for operational expenses, and that the most effective way to increase public safety is to revitalize our neighborhoods with […]

    COASTing Over The Line | CincyVoices said:
    September 12, 2011 at 11:22 am

    […] how the project has been funded up to this point. Funds for construction come of out of a fund that cannot legally be used to to fund firefighting (or police, etc and so on). Fire companies are not being browned-out to support streetcar […]

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