COLUMBUS — Springfield Township and the village of Holland have begun the process of creating a Joint Economic Development Zone around the planned McCord Road railroad underpass project. But a bill that could come to an Ohio Senate vote as early as next week could stop the effort in its tracks.
A similar idea in the early stages involving the township and Toledo to help finance construction of a new I-475 interchange at Dorr Street could meet the same fate under House Bill 289.
Toledo has signed on to the bill, having negotiated an amendment that would save its existing JEDZs with Maumee, Monclova Township, Rossford, Oregon, Perrysburg, Berkey, and Northwood and allow their future renewals as long as their geographic boundaries and tax rates don't change.
“This is a bill that is a response to a few terrible examples and abuses of this law, but it can be fixed easily...,” said Andy Glenn, chairman of the Springfield trustees. “It's going to have a negative impact on economic development across the state of Ohio. They're not looking at the big picture. They're only looking at the few bad examples.”
House Bill 289, as rewritten Wednesday, would prohibit the creation of any new JEDZs as of the end of this year. JEDZs are created by two or more local governments to spur development and share in municipal income tax revenue collected within the zone. Townships that are otherwise prohibited from levying an income tax can share revenue from such a tax as part of a JEDZ.
The bill was initially introduced by Rep. Kirk Schuring (R., Canton) and passed overwhelmingly in the House as an outright ban on JEDZs. It was a reaction to cases largely seen in central and southwestern Ohio, where local governments joined forces to envelop existing large employers into zones.
“It's an egregious tax grab,” Mr. Schuring told the Senate Finance Committee. “It's bad public policy, and I think we should eliminate it.”
Red flags were raised in the Senate when Toledo realized how the bill would affect its existing JEDZs, which have not faced the same criticism. The city worked to negotiate a compromise.
While the bill would still close the door to new JEDZs, a new door would open for cities like Toledo to join forces to create a municipal utility district.
But townships not in an existing JEDZ would be left out of the mix, prompting the Ohio Townships Association to oppose the bill.
Springfield plans public hearings for June and July, with the anticipation of putting a McCord Road JEDZ proposal before voters in November. That zone would encompass an already developed market district around the long-awaited $18 million project carrying the road under Norfolk Southern tracks.
The JEDZ discussions with Toledo for the area surrounding a proposed Dorr Street/I-475 interchange are in the early stages and could not be ready for a November vote. The township would be counting on the JEDZ to help it generate its $1.5 million share of the interchange project cost.
Sen. David Burke (R., Marysville), a committee member, plans to ask a super-majority of his colleagues to support an emergency clause allowing the bill to take effect immediately upon the governor's signature, instead of waiting the usual 90 days. That would mean any JEDZ proposal not already approved for the November ballot would be killed.
Mr. Burke, whose district stretches north to Sandusky Bay, is trying to head off “a rush for the door” to get new JEDZs approved this fall before the window permanently closes on Jan. 1. He's particularly concerned about a possible JEDZ near Marysville swallowing the Honda vehicle plant.
“That township is actively shopping for a partner with which they can share their taxing authority,” he said. “There's no project in mind. It's a tax grab ... We in the General Assembly have consciously lowered people's income taxes ... This is the exact opposite direction.”
Contact Jim Provance at: email@example.com or 614-221-0496.