Ohio's budget includes $7 billion a year in tax breaks and loopholes; many are wasteful, involuntary gifts from taxpayers to special interests, politically powerful businesses, and rich individuals. But not all of them: Some tax expenditures advance worthwhile public purposes. The latter description appears to apply to a sales tax exemption sought by the Toledo Mud Hens.
The nonprofit corporation that operates Toledo’s minor-league baseball team wants the exemption to wipe out a disputed $553,000 bill for back sales taxes from the state Department of Taxation. The exemption would apply only to purchases made by the team, such as the video scoreboard at Lucas County-owned Fifth Third Field, and not to items that fans buy at the ballpark.
Mud Hens officials note that the club has not paid state sales taxes since it assumed its nonprofit status in 1965. A similarly situated Triple-A ballclub in Ohio, the Columbus Clippers, already gets the tax exemption the Hens request.
The Mud Hens are more than a baseball team; the corporation’s philanthropic work is considerable. Last week, the team announced an expansion of its partnership with ISOH/IMPACT to collect supplies for disaster relief. The team’s charitable fund, Helping Hens, provided $30,000 in grants last year to local institutions that serve young people.
At the same time, the Mud Hens remain a major generator of economic activity in Toledo. Fifth Third Field is a firm anchor of the redevelopment of the city’s Warehouse District.
Even in seasons such as this one, when the team’s on-field record is dismal, the Hens still attract thousands of fans downtown at least 72 times a year. Those fans also patronize bars, restaurants, shops, and parking lots near the stadium. That activity amounts to a lot of public and private revenue.
State government needs to conduct a comprehensive review of the tax deductions, exemptions, and credits it grants, with an eye toward eliminating unnecessary and outdated ones on a broad scale. Some tax breaks, such as the sales tax exemption for prescription drugs, deserve to continue. Many others don’t.
The General Assembly and Gov. John Kasich have shown little interest in launching this weeding-out process. Even if they suddenly got interested, it’s likely too late to affect the new two-year state budget that takes effect July 1.
But whatever else they do to the budget, they should make sure it includes the tax exemption that the Mud Hens seek and deserve.
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