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Toledo, Ohio & Lake Erie

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Development zone bill nears vote in senate

A bill that could end the authority of Ohio municipalities and townships to establish new Joint Economic Development Zones may be up for a vote before the Senate Finance Committee by the end of May.

State Sen. Randy Gardner, R- Bowling Green, a member of the committee, said he expects the bill to be ready for a floor vote shortly after it comes out of committee.

Gardner and Sen. Edna Brown, D- Toledo, hosted a recent forum in Perrysburg on HB 289, which passed in the House in February by a vote of 89 to 8.

As passed by the House, the bill would:
• Terminate on Jan. 1 2015, the authority of municipalities or municipalities combining with townships to create new JEDZs.

• Prohibit the renewal of a JEDZ contract, which can be in effect for multiple years, after Dec. 31, 2104.

• Require entities entering into a JEDZ contract before Dec. 31 to formulate an economic development plan for the zone, including a schedule for implementing new or expanded services, facilities or improvements.

• Require the formation of review councils to evaluate the effectiveness of the development plan. The councils would include the county auditor, owners of the four businesses with the most employees within the JEDZ, someone affiliated with an economic development organization, and a member of the public.

• Require at least half of any income tax revenue generated within a JEDZ formed by a municipality and a township be used for the services, facilities or improvements until they have been completed.

Local officials at the forum said JEDZs were a necessary tool for economic development.

Sheilah McAdams, an attorney representing Spencer Township, said the formation of the zones have helped townships avoid “protracted annexation battles and deteriorating working relationships” with municipalities.

She and others speaking at the forum described HB 289 as an over-reaction to JEDZs formed recently in central and southern Ohio that were apparently designed more for tapping existing tax revenues rather than fostering economic development.

Several people testified in favor of the bill when it was pending before the House State and Local Government Committee, including an employee of the Pickaway Correctional Institution who claimed a development agreement between Scioto Township and Grove City was put in place to capture income tax revenues from prison employees.

Ohio law doesn’t permit townships to levy income taxes on their own.

Eileen Granata, an attorney with the City of Toledo law department, read a letter from Mayor D. Michael Collins during the forum that states the economic sustainability of the region will be determined by “our ability to collaborate with our neighbors.”

“While the City of Toledo is involved in 7 JEDZs, perhaps the most successful example can be seen at the Triad Industrial Park,” the letter says. “At this location, the city has invested more than $2.5 million and in conjunction with the City of Maumee and Monclova Township, has created or retained more than 200 jobs.”

Michael Beazley, Oregon administrator, also spoke in favor of not unraveling the current legislation.

“Very few tools allow us to compete together rather than against each other,” he said.

The owner of a business in Briarfield Business Park said he favored the bill because he was hit with an income tax when the City of Maumee and Monclova Township formed a development zone.

State representatives Tim Brown and Chris Redfern, who were unable to attend the forum, split their votes when the bill was before that chamber.

Rep. Brown, R- Bowling Green, told The Press he voted for the bill because it brings about needed changes.

“I supported HB 289 because of its common sense restructuring of the Joint Economic Development Zone (JEDZ) and Joint Economic Development District (JEDD) process,” he said. “Use of the JEDZ and JEDD tools should bring about true economic development, and services, not just a revenue stream from taxation. To ensure a more proper use of these tools, properties and businesses impacted by the creation of a zone or district must agree and consent to being included in any future arrangements. The end result will mean a voice in the process for those businesses and entities proposed for taxation.”

Rep. Redfern, D – Catawba Island Township, voted against the bill, saying local communities need more tools for economic development in the wake of the loss of local government funds from the state in recent years.

“JEDZs, tax increment financing, and other programs are ways to build economic development at the local level,” he said. “I’d rather err on the side of giving more tools to local government. It’s just a bad bill.”

Sen. Gardner said the bill’s primary sponsor Rep. Kirk Schuring, R- Canton, has indicated he is flexible on several of the bill’s provisions.

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