Area leaders fight state bill ending development zones

4/26/2014

Brown

A number of Northwest Ohio officials lobbied Friday to either defeat or change a state bill that could strip cities and townships of the authority to create Joint Economic Development Zones.

House Bill 289, which recently passed the Ohio House overwhelmingly, would strip the city of Toledo and other local governments of their authority to create such zones that geographically target economic development efforts and allow cooperating governments to share in income taxes generated there.

State Sen. Randy Gardner (R., Bowling Green), who serves on the Senate Finance Committee considering the bill, and Sen. Edna Brown (D., Toledo), who does not, hosted a forum Friday in the Depot Ballroom of the Holiday Inn French Quarter on U.S. 20 in Perrysburg Township. It attracted a wide range of public officials who offered criticism of the bill.

“This has to deal primarily with some serious issues that are happening in central [and] southern Ohio that we are now brought into up here,” said state Rep. Barbara Sears (R., Monclova Township). “It appears we were doing it right up here and maybe they weren’t doing it right down there and we are bearing the brunt of that.”

Toledo Mayor D. Michael Collins is among those who have objected to the bill sponsored by Rep. Kirk Schuring (R., Canton). Mr. Schuring said he wants to crack down on abuses of JEDZs in which local governments join forces to envelop existing businesses into zones in order to increase income tax collections.

Mayor Collins did not attend the meeting but sent a letter that was read for the two state senators and the crowd of about 70 people.

“The city of Toledo believes that the economic sustainability of not just the city, but the region, will be determined by our ability to collaborate with our neighbors,” the mayor’s letter said.

The city is involved in seven JEDZs. The mayor said the most successful has been at Triad Industrial Park. “At this location, the city has invested more than $2.5 million and, in conjunction with the city of Maumee and Monclova Township, has created or retained more than 200 jobs,” he wrote.

Mr. Gardner said there are several potential amendments not yet added to the bill that would allow Toledo and other cities to keep existing JEDZs and seek regular renewals as long as they don’t raise the tax rates or geographically expand the zones. Toledo, however, argues the amendment would still endanger the city’s plans to create and expand zones.

“I do think meaningful, significant change in the bill is going to occur before that vote happens,” Mr. Gardner said. “I think the bottom line is local governments want to be able to collaborate and work together and they believe for the most part, the [existing] JEDZ law works for them.”

Andy Glenn, Springfield Township trustee chairman, said the township is negotiating its first JEDZs — one with Holland and a second with Toledo.

“The only way Springfield Township has to get revenue is through property taxes and a JEDZ,” Mr. Glenn said. “We think people are paying enough property taxes so we are trying to identify ways to afford services, and a JEDZ is a perfect way to do that.”

Mr. Glenn said the township would eventually be unable to afford its $600,000 annual cost for Lucas County sheriff’s road patrols without payroll tax from a JEDZ.

The Ohio General Assembly in 1985 authorized cities to join forces for economic development and sharing of income-tax collections from such zones. In 1996, lawmakers added townships, which are not otherwise permitted to levy municipal income taxes.

Local voters must approve such arrangements, but critics argue that a JEDZ is too easy to impose over businesses’ objections compared with a joint economic development district, which requires a vote of the property owners.

As currently written, Senate Bill 289 would prohibit, as of Jan. 1, 2015, the creation of new JEDZs.

Toledo has such agreements with Maumee, Monclova Township, Rossford, Oregon, Perrysburg, Berkey, and Northwood, with income-tax rates in those zones ranging from 1.5 percent to 2.25 percent.

After several officials spoke Friday about the necessity and benefits of JEDZs, one business owner argued in favor of the bill.

“I am in favor of the law being changed to not allow government to impose taxes the way they did with us,” said David Jankowski, owner of Jann’s Netcraft in Monclova Township.

“One day, I woke up in 2002 and read in The Blade that Briarfield Business Park is going to be in this JEDZ and we will pay 1.5 percent income tax.”

Contact Ignazio Messina at: imessina@theblade.com or 419-724-6171 or on Twitter @IgnazioMessina.