Tax-break conditions in Toledo criticized

City less competitive for jobs, report says

9/29/2011

Companies that receive property tax breaks in cities and counties across Ohio tend to face fewer hiring restrictions than those investing in Toledo, a report by the city administration shows.

The report bolsters the Bell administration's push to eliminate conditions currently placed on firms that get property tax breaks in return for creating jobs in the city. The attempt comes as the city prepares to grant tax credits to Chrysler Group LLC in return for an investment of at least $365 million to expand and improve its Toledo Assembly complex, creating an expected 1,105 new jobs.

Both the city and Chrysler maintain there is no connection between the company's plans and the city's efforts to streamline tax break policies. A City Council committee hearing is scheduled for today to discuss the legislation, along with the proposed tax incentives for Chrysler.

Under Toledo's current law, firms that set up or expand operations inside the city must hire at least a quarter of their new employees from Lucas County to qualify for property tax breaks.

The law specifies that new hires must have either lived in Toledo for a year or more, or be Lucas County residents who are unemployed, on government assistance, or disabled. Ten percent of new employees must come from Toledo's central-city area. Companies must also advertise new positions at The Source of Northwest Ohio, Lucas County's job center.

Those requirements make Toledo an oddity among other major cities and counties in the state, according to the report. Most attach almost no such conditions to property tax incentives, including Cincinnati, Columbus, Cleveland, and Dayton, as well as Cuyahoga, Franklin, Mahoning and Wood counties, the report shows.

The absolute accuracy of the report was unclear yesterday. When contacted by The Blade, a spokesman for the mayor of Cleveland said the city requires recipients of property tax abatements to abide by "living wage" rules and hire Cleveland residents for at least 20 percent of the construction workforce.

Toledo's report on Cleveland says the city negotiates tax break conditions on a case-by-case basis. Department of Development officials who put the report together did not return calls to discuss the discrepancy yesterday evening.

Dan Williamson, spokesman for the mayor of Columbus, confirmed the city does not attach hiring conditions to property tax breaks -- as in Toledo, employees pay income tax to the city if they work there even if they live outside city limits.

Overall, the Bell administration's findings show Toledo is failing to make itself as competitive as other areas of the state, deputy mayor Tom Crothers said.

"The more stipulations and the more hurdles you put in front of business, the less competitive your community is," Mr. Crothers said.

Some councilmen objected to the city's proposal, saying it would allow companies to benefit from tax breaks while doing nothing to help Toledo's unemployed workers.

Councilman Adam Martinez said yesterday he is not convinced by the administration's report because it gives no indication of how successful tax break policies have been in bolstering local economies.

Councilman Joe McNamara said: "I think that asking employers that request tax breaks to hire locally is reasonable. There has to be a way to work that policy into our incentive program."

Councilman George Sarantou, who asked the city to produce the report, said the findings confirm what he had suspected all along.

"Government doesn't create jobs, businesses create jobs, and we can't have restrictions that are going to chase them away," Mr. Sarantou said.

Contact Claudia Boyd-Barrett cbarrett@theblade.com or 419-724-6272.