Toledo officials defend Joint Economic Development Zones
4/9/2014COLUMBUS — Officials from Toledo met Tuesday with the chairman of the Ohio Senate committee considering a bill that could strip the city of the authority to create Joint Economic Development Zones with other local governments.
The question is whether a bill can be framed that will give Mayor D. Michael Collins what he wants — the city’s continued ability to keep and create JEDZs — while preserving the crackdown on abuses desired by the bill’s sponsor, Rep. Kirk Schuring (R., North Canton).
“What Rep. Schuring wants is to deal with issues that we don’t experience in northwest Ohio,” Mr. Collins said. “The relationships we have with our partners have been totally positive. I would hope that perhaps a more in-depth look at northwest Ohio’s operations, Toledo and our partners, will set forth a model so that the issues that gave rise to this current legislation could be avoided.”
Mr. Schuring said the bill remains a work in progress.
But he again stressed that the final result must prohibit cities and townships from joining forces to “cherry pick” large businesses and employers for income taxation while providing little or no new economic development.
Most complaints about such practices have centered on suburbs of Cincinnati and Columbus.
Mr. Schuring noted local governments still have the option of Joint Economic Development Districts, which require greater buy-in by affected businesses before they can be created.
“There’s really a spotlight on Joint Economic Development Districts, which have been used throughout our state with tremendous success, and it’s still a viable tool for townships and cities to work together to engender economic development,” he said.
State Sen. Scott Oelslager (R., Canton), Senate finance committee’s chairman, said no action will be taken on the bill until after lawmakers return from Easter recess.
“That gives everybody time to sit down and talk about things,” he said.
In separate meetings with Mr. Oelslager and several local lawmakers, Mr. Collins was joined by Chief of Staff Bob Reinbolt, city Economic Development Director Matt Sapara, and Columbus lobbyist Andy Herf.
The Ohio Chamber of Commerce was already on board with Mr. Schuring’s bill.
He said the National Federation of Independent Business and the American Federation of State, Municipal, and County Employees also have just signed on.
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 to a JEDD.
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.
A proposed rewrite from Mr. Schuring would grandfather in existing JEDZs and allow for future renewals that do not involve a geographic expansion or increased tax rate.
Michael J. DeTemple, executive director of the Ohio Township Association, told the committee his organization has problems with both the ban on new JEDZs and the limited renewals.
“There’s a grandfathering clause, but over time, things need to change,” he said. “If a significant amendment comes along, it could be the end of an existing JEDZ.”
Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.