County opposes new state business tax abatement bill

MEDINA — A new state bill aiming to drastically overhaul local business tax abatement programs has drawn opposition from Medina County commissioners and economic development officials. In an email written this week to Ohio Rep. Derek Merrin, R-Monclova Township, who chairs the Statehouse Ways & Means Committee, Medina County commissioners called House Bill 123 a measure that would "foster local government behavior and tactics that are predatory and likely result in cannibalistic outcomes for local school district tax bases." Bill specifics cited by commissioners as aiding those outcomes are: • Removing the requirement that annual reports detailing Community Reinvestment Agreement (CRA) commercial and industrial projects be submitted to school districts. • Increasing from 50 percent to 75 percent the percentage of a proposed CRA exemption for a commercial or industrial project that requires obtaining permission from a school district affected by any tax abatement. • Reducing from five to two years wait periods at the end of a tax abatement that a business must remain in that same community paying a normal rate. • Elimination of fees to local governments for administrative tasks of managing and ensuring compliance with the CRA program. "Lastly, public confidence and support for statewide business incentive programs needs to remain a high priority," commissioners wrote to Columbus legislators. "Over the last 25 years, businesses have been required to justify receipt of property tax incentives by declaring a commitment to create new jobs or retaining workers. This bill seeks to undermine a consistent and statewide requirement that justifies those tax abatements." House Bill 123 was introduced in mid-February with state Reps. Mark Frazier, R-Newark, and Jon Cross, R-Kenton, signing on as cosponsors. Commissioner and former state Rep. Steve Hambley said he first heard of the bill last year and fears local predictions of its effects could be exacerbated by an economy still deeply affected by the COVID-19 pandemic. "I think this is being done under the premise that the small economic development offices don't like all the paperwork and having to go to the state," he said. "Frankly, that's exaggerated. What they've really done is create more of a problem. This is, in some ways, a big tax abatement program for businesses that will undermine public confidence that these programs encourage investment." "Eventually, people are going to go, 'You're giving away most of our tax base,'" Hambley added. "The people will react because who has to pay the taxes when they're not being paid by the businesses? The residents do. I'm sure the schools will be taking an adverse position to this as well. It's not going to be good for any of them." Other concerns detailed by Hambley included the bill's lessening of job creation and job retention reporting from businesses and potential for various communities to "poach" businesses away from each other due to wait times going down from five years to two. Medina County Economic Development Corp. Executive Director Bethany Dentler will travel to Columbus next week to speak in person before the Ways & Means Committee. She remembered filling a similar role in the city of Norwalk from 2003 to 2008, comparing that experience to arguments put forth by backers of House Bill 123. "I was new to Ohio and had to learn all of the laws," Dentler said. "That was while running literally a one-person office. I didn't have to hire outside counsel or spend a lot of money on administrative costs. I know that's what the bill's sponsors are saying is this problem. I don't find that to be the case." "School districts are particularly impacted by (CRA agreements)," she added. "We've tried very hard in Medina County to partner with our schools. They're the provider of our future work force. We need to have strong schools. We've had the schools support larger tax abatements when they see the wealth and jobs it can bring in." Contact reporter Jonathan Delozier at (330) 721-4050 or jdelozier@medina-gazette.com.