Money

College boards should communicate up when cash goes away

Ohio, like almost every other state, offers a full range of tax breaks and other economic development incentives to attract businesses to communities. Leaving the debate aside for a moment about whether such subsidies achieve their stated goals – including creating jobs or starting businesses where they otherwise wouldn’t – the question arises as to whether the group operating on most affected by the loss of revenue, should have full control over its subsidies, part or even veto harmful business. We think the answer is “yes”.

Public school districts in Buckeye State are funded through local property taxes and typically receive the largest portion of local property tax collection from public institutions. How do the inheritance tax breaks affect you? What role do they play in the approval process? We met with several state and local politicians from across Ohio to get answers to this question. Here are the lessons learned from these meetings:

Overall, tax breaks have a negative impact on Ohio’s school budgets, and cities often distribute them indiscriminately with no meaningful involvement of school districts in the negotiations. The exact effects are uneven. For example, poor urban districts tend to feel more burdensome than their wealthier peers due to higher tax breaks and chronic underfunding.

Currently, school districts have limited powers to block a small fraction of community reinvestment (CRA) and enterprise (EZ) applications; You have absolutely no way of stopping comparatively much more expensive Tax Increment Financing (TIF) districts. Worse still, school authorities often fail to exercise their limited powers or fail to secure the reimbursements to which they are entitled from the cities.

Imagine the outcry if a large pot of the police budget could be given away by a third party.

We also learned that some communities encountered resistance when they tried to intervene. Columbus and Cincinnati are good examples. In Columbus, protesters marched against a DC tax cut for the new Cover My Meds corporate campus against City Hall, which would have resulted in almost $ 55 million in lost revenue for the school district over the course of the reduction. The cut was approved anyway.

In another incident involving a different company, the agreement was rewritten to reduce the number of new jobs required when it was discovered that the recipient would not keep their promise to hire.

In Cincinnati, where three councilors were recently arrested on tax break allegations of corruption, there is a monumental inter-city partnership between the teachers’ union and other community organizations to stop the widespread tax breaks and predatory TIF districts. The Cincinnati Educational Justice Coalition held briefings, held public meetings, and organized protests. Despite its best efforts, the city still approved 15 new TIF districts and 30 consecutive year-long cuts for the new FC Cincinnati stadium in the Port Authority district.

In addition, to the dismay of the school, the city council extended a total ban on allowing the school council to participate in the giveaways for 10 years. Many of the schools in Cincinnati are in dire need of repair and modernization.

Worse still, existing TIFs go unchecked so no one has any idea whether they will be paying off.

In other words, the city council deliberately ignores the will of the public in the interests of the company.

Unlike Columbus and Cincinnati, a small, affluent suburb of Columbus made it work through a formula of intergovernmental collaboration, widespread public engagement, and community alliance. Even if the school district cannot formally approve or deny a CRA application, the city’s economic development officials and school principals at least meet to discuss and discuss deals. In addition, the school district and city council actively participate in public. The existence of a strong civic coalition made up of a parent-teacher association, school authority, city administration, chamber of commerce and university officials has also helped to minimize the damage caused by tax breaks.

Why can’t Columbus and Cincinnati achieve this small town’s success? Our respondents attribute the reason to nepotism and the large differences in prosperity (along the racial lines) in both cities. That makes it harder to unite against poorly designed reductions. Columbus and Cincinnati both have ingrained and incredibly powerful political machines that work closely with corporate interests. The Columbus School Board is a stepping stone to higher political office; You’ll be counting on developer donations across the board.

The formal authority given to Ohio’s school districts in relation to tax breaks can be greatly expanded. They should get a full vote, or the state should take its revenue off the negotiating table entirely (other states do). In the meantime, the school authorities have to win back their vote in the approval process and at least demand adequate compensation from the cities for the lost income so that teachers and students are not neglected.

Connor Rigney, originally from Cincinnati, is pursuing a Masters of Regional Planning from Cornell University and is a research intern with Good Jobs First, a national nonprofit resource center that promotes fair, transparent economic development. Christine Wen, of Falls Church, Virginia, is a project coordinator at Good Jobs First.

Connor RigneyChristine Wen