JOINT ECONOMIC DEVELOPMENT
Bill would keep current zones, block new ones
Toledo officials support action after opposing wider restrictions
5/10/2014COLUMBUS — Key lawmakers say they believe they’ve struck a compromise allowing Toledo to keep its existing joint economic development zones while preventing the creation of new zones that critics argue have been more about generating tax revenue for government than creating jobs.
Senate Bill 289 could come to a vote in the Senate as early as Wednesday, and its sponsor, Rep. Kirk Schuring (R., Canton), said he’s confident he has the votes for passage. The city of Toledo is on board as well.
“It allows us to continue our JEDZs as they are and renew them,” city spokesman Lisa Ward said. She said the bill gives the city some time to complete plans for new JEDZs with other local governments for which talk is already under way before the window permanently closes.
The Senate Finance Committee is expected to amend the bill to allow JEDZs in existence as of the end of this year to continue.
Toledo has such agreements with Maumee, Monclova Township, Rossford, Oregon, Perrysburg, Berkey, and Northwood, with income-tax rates ranging from 1.5 percent to 2.25 percent.
They could also be renewed in the future as long as the zone isn’t geographically expanded and the tax rate increased.
But as of Jan. 1, if Toledo or other cities want to join with other local governments to target areas for economic development, they’ll have to instead consider a municipal utility district, in which utilities are extended into a specified zone and the resulting economic development taxed and shared accordingly, or a traditional Joint Economic Development District, which requires greater buy-in from existing businesses engulfed in the district than is required under a JEDZ.
At least half of any new revenue generated would have to go back into the district for services and facilities related to the economic development plan.
Townships, however, would be left out in the cold.
The proposed amendment specifies that a government that doesn’t have the authority now to impose a municipal income tax, namely townships, cannot participate in future districts.
They may, however, continue to be involved in the existing JEDZs that would be grandfathered in under the compromise.
“Current law was all about assessing unfair taxation with very little accountability toward economic development,” Mr. Schuring said.
“This keeps the eye on job creation and economic development. We’re developing a bill that works for local governments and preventing what’s been described as tax grabs.”
Most of the criticism of supposed abuses has centered on the Columbus and Cincinnati suburbs.
Mr. Schuring stressed that not everyone, including the city of Toledo, will get everything they want. He also said he hopes to make some changes in the future to JEDDs.
“All along we were trying to strike a balance between local governments working together and protecting unfair taxes against existing businesses,” said Sen. Randy Gardner (R., Bowling Green), a committee member. “There’s an emerging consensus that we’ve been able to achieve most of that balance.”
The original version of the bill outlawing JEDZs altogether overwhelmingly passed the House with the support of all three of the state representatives for Toledo.
Only afterward did the city realize the effect it would have on its existing zones and its plans to create more.
Mr. Gardner and Sen. Edna Brown (D., Toledo) recently hosted a regional forum to brainstorm ways to strike some compromise.
“It’s been an interesting debate on economic development,” Mr. Gardner said. “If the eye is on economic development and jobs, then there should be pretty decent support for this bill.”
The bill is set for a hearing on Tuesday with a final committee vote and possible full Senate vote on Wednesday.
The bill would then have to return to the House.
Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.