Liberty Township, Powell join Bexley in pact to share taxes
Liberty Township and Powell city officials came together in a special meeting Friday, June 14, to discuss the creation of a Joint Economic Development Zone that would collect an estimated $1.3 million in income taxes each year.
In partnership with the city of Bexley, establishing a JEDZ would allow Powell and Liberty Township to collect funds that originate as income taxes at Bexley's rate of 2.5 percent until 2043. The income taxes would be collected from workers whose companies fall within the zone's boundaries, which include Liberty Township-owned properties, Olentangy schools located in Liberty Township, the Columbus Zoo and Aquarium, Zoombezi Bay, Safari Golf Course, Del-Co Water, Delaware County Sanitary and Columbus State Community College's Delaware branch.
If approved by the city and the township, the JEDZ contract will appear before city and township voters as an issue on the Nov. 5 ballot.
"This JEDZ will promote a spirit of cooperation between the city and the township that has been lacking in the past," said township Trustee Curt Sybert. "This is an absolute no-brainer for Liberty Township, the city of Powell and even our partners in the city of Bexley."
JEDZ districts were created to help cash-strapped townships that aren't legally authorized to collect income taxes. As part of the partnership, Bexley would act as the collecting agent and receive 3 percent of the JEDZ gross revenue shares to cover its collection costs.
Research conducted by Powell officials shows the parcels in the proposed JEDZ have an estimated annual payroll of $52 million. If the 2.5 percent income tax is applied, that would add an estimated $1.3 million to the JEDZ fund. Of those earnings, 85.8 percent would be allocated to Powell and 14.2 percent to Bexley. A separate contract would split Powell's share, allocating half of it to Liberty Township.
The contract also calls for 10 percent of the gross JEDZ revenues to be funneled into projects within the JEDZ territory.
A JEDZ board funded by 2 percent of the divided revenue would consist of nine representatives -- three each from Bexley, Powell and Liberty Township -- and advise on how the funds should be spent. Sybert said joint projects resulting from the JEDZ could include bike paths and park equipment.
In addition to lending its income tax rate, Bexley Mayor Ben Kessler also has agreed to share resources with Powell and the township, including specialized road equipment, economic development strategies and arborist expertise.
"Collaboration, cooperation, shared services -- these are all buzzwords in local government right now, and for good reason," Kessler said. "We need to be more efficient and we need to be partners in things, and on top of that, (the JEDZ) is obviously economically beneficial to all parties involved."
Although the JEDZ contract will appear before Bexley City Council, it does not require a vote from Bexley residents. If Bexley residents were ever to increase or decrease the city's income tax rate through a vote, however, that would apply to the JEDZ.
Estimates show that fewer than 5 percent of Liberty Township residents would be affected by the JEDZ-imposed income tax, meaning out-of-town workers would make up the majority of those whose pay would be redirected. Whether a worker's income taxes would be raised or remain the same if the JEDZ went into effect would depend on the tax rate and tax credits available in his or her home city.
"We included (in the JEDZ) mostly nonprofiting entities that are big users of township services, such as fire and roads, but don't currently pay a dime in taxes because they are tax-exempt," said Township Administrator Dave Anderson. "All we're doing is looking for them to pay their fair share."
Some who attended the June 14 meeting expressed concern that the JEDZ territory could be expanded someday to include residential properties, but Anderson said any changes would have to go through the voters, adding there is no intent to tax property owners.
"We're using this tool because the public has sent us a message loud and clear that they don't want property taxes paying for things," Anderson said, citing the last general election, when voters defeated a fire levy, causing the department to downsize its staff by 20 percent.
Because voters have voiced their disapproval of raising taxes despite strains on local coffers caused by the elimination of estate taxes and the state's local government fund, attorney Donald Brosius of Loveland & Brosius LLC introduced the JEDZ to Sybert and Powell leaders.
Brosius is responsible for recent JEDZ contracts between Westerville and Blendon Township, and between Obetz and Prairie Township. Unlike in those contracts, Liberty Township has not used the typical formula and paired with its mother city to create a JEDZ, because in 2010, Powell residents voted down an income tax increase.
Along with a majority vote at the ballot, the JEDZ is contingent on an amended Cooperative Economic Development Agreement between the city and the township. The agreement that guides annexation from the township to the city has had both parties in contention since 2008, when it allegedly was violated by a former township trustee. After years of negotiating, the JEDZ contract requires leaders to finalize changes to the agreement within a year of its approval, or else the JEDZ will be nullified.
Powell City Council will have its first reading of the JEDZ resolution at its July 16 meeting. Liberty Township will hold a public hearing on the proposal at 7:30 p.m. July 29 at the Liberty Township Complex, 7761 Liberty Road.