COLUMBUS — A reworked bill that would restrict but not eliminate local government’s Joint Economic Development Zones is headed for Gov. John Kasich’s desk.
The state House on Wednesday voted 87-6 to approve Senate changes to House Bill 289 that would prevent the creation of new JEDZ but allow existing zones to continue and be renewed as long as the zone’s geography and municipal income tax rates don’t change.
Critics of JEDZ had argued that some townships that don’t have the authority to levy income taxes on their own are abusing the system by joining with cities and villages with taxing authority to envelop existing employers in a zone to raise revenue.
An earlier version of the bill that would have outright killed JEDZ passed the House nearly unanimously late last year before the city of Toledo realized the danger to its existing zones with Maumee, Monclova Township, Rossford, Oregon, Perrysburg, Berkey, and Northwood.
While they’re closing the door to future JEDZ, lawmakers are opening another door. The bill encourages cities and villages to join forces to instead create Municipal Utility Districts in which utilities are extended onto land and the economic development that results is taxed and shared accordingly. Townships will not be able to partner in a utility district.
Townships could join with cities to create similar Joint Economic Development Districts, but those are harder to create because they require support from a majority of the businesses that would be included in the district.