A bill that passed the state House of Representatives, with the support of Toledo-area lawmakers,would prohibit new or renewed “joint economic development zones” of the kind used by the city of Toledo to generate tax revenue and promote regional economic development.
Toledo Mayor D. Michael Collins and his staff are furious at the passage of the bill that they say came about without the city being contacted by its representatives.
The bill, awaiting a vote in the Senate, abolishes new joint economic development zones after Jan. 1, 2015, and it prohibits current zones from being renewed when their terms expire.
“We had no knowledge that that was going on,” Mr. Collins said. “We have representatives whose purpose is to represent their constituents in the General Assembly.”
Toledo has joint economic development zones with Maumee, Rossford, Perrysburg, and Monclova Township, which generated $961,474 for Toledo in 2013.
One of those agreements, covering part of the Arrowhead Industrial Park, generates an income tax of 1.5 percent, of which Maumee and Toledo each receive half. That agreement was established in 1991 with a 30-year term.
City Finance Director George Sarantou said the prohibition on future economic development zones conflicts with lawmakers’ and Gov. John Kasich’s oft-stated goal of regional cooperation.
“This is a perfect example of where cooperative agreements are working and where we’re not fighting over companies and where they should locate. It’s very disappointing that the members of the Northwest Ohio delegation to the Ohio House of Representatives have never contacted us to get our input on this,” he said.
House Bill 289, which was approved Feb. 26 by a vote of 89-8, abolishes new “joint economic development zones,” prohibits substantial amendments to economic development zones, and prohibits JEDZs from being renewed. The bill is set for a Senate Finance Committee hearing at 2:30 p.m. Tuesday.
The bill’s sponsor, Rep. Kirk Schuring, (R., North Canton) said economic development zones don’t require a vote of approval by property owners, and they have been used to impose taxes on businesses in central Ohio rather than foster economic development.
“They’ve been used to perpetrate egregious tax grabs,” Mr. Schuring said, adding he was not aware of any such “mischief” involving Toledo economic development zones.
Mr. Schuring said his bill leaves in place the similar-sounding “joint economic development district,” which is similar to an economic development zone but which requires approval from property owners in the district. Toledo has a JEDD with Troy Township that produced $4,281 for Toledo in 2013.
Mr. Schuring said the bill went through seven hearings and was not opposed either by the Ohio Municipal League or the Ohio Township Association. It was co-sponsored by state Rep. Mike Sheehy (D., Oregon), whose district includes Oregon, Maumee, and a part of the city of Toledo.
Mr. Sheehy said he did not know about Toledo’s and Maumee’s economic development zone.
He said he should have been better acquainted with the effect it would have on Toledo.
Mr. Sheehy said he mentioned the bill at a social function to Matt Sapara, the city’s new economic development director, on Feb. 14, and Mr. Sapara told him, “We’re looking into it,” but said he wasn’t trying to push responsibility off on Mr. Sapara.
“My office should have communicated more with the municipal governments on it,” said Mr. Sheehy, who was appointed last summer to the House District 46 seat. He said there was no opposition testimony, and no objections voiced by the Toledo-area economic development agencies, such as the Regional Growth Partnership and the Toledo Regional Chamber of Commerce.
Mr. Sheehy said he raised Toledo’s newly discovered concerns Thursday with Mr. Schuring, who agreed to consider changes to the bill to accommodate communities with legitimate economic development needs.
Lucas County lawmakers who supported the bill included Rep. Michael Ashford (D., Toledo), Mr. Sheehy, Rep. Teresa Fedor (D., Toledo), and Rep. Barbara Sears (R., Monclova Township).
The bill was also supported by seven other legislators from northwest Ohio. The only regional representative to vote no was Rep. Chris Redfern (D., Catawba Island).
Ms. Fedor, Mr. Ashford, and Ms. Sears did not respond to a reporter’s question on whether communities interests were taken into account in approving the bill.
Mr. Collins said he is sending a letter to local lawmakers saying, “This regressive legislative action compromises the collective energies of regional economic strength.”