Upper Arlington and Clinton Township officials are continuing to discuss an agreement that would allow them to share income tax revenues from existing and new businesses in the township.
Upper Arlington Community and Economic Development Manager Bob Lamb said Monday, March 11, he's hopeful the city can strike a deal to create a Joint Economic Development Zone (JEDZ) in Clinton Township that would benefit both communities.
If a deal could be struck, Upper Arlington, which currently provides fire and emergency-response services to Clinton Township, would collect a portion of income tax revenues from businesses located in the township.
Under Ohio law, townships are prohibited from collecting income taxes. However, a JEDZ would enable Upper Arlington to share a portion of the taxes it collects with Clinton Township.
"If the JEDZ were implemented, the city would enable the township to collect payroll tax from the businesses that reside within the township's boundaries," Lamb said. "The funds collected from the payroll tax would then be divided, based on the terms listed in the JEDZ agreement between the city and the township."
Lamb said the agreement also would allow Upper Arlington to provide economic development services to help business recruitment and retention in the township.
He said the city has offered "several" revenue-sharing arrangements, including proposals to direct as much as 65 percent of the income taxes to the township, or to split the revenues evenly.
"This would be determined by the amount of services the city was providing to the township under the terms of the JEDZ agreement," Lamb said. "The cost of managing the financial aspects of the JEDZ would be based on the size and scope of the properties contained within the JEDZ."
Clinton Township Trustee Carl Reardon said Upper Arlington recently provided the township with a new revenue-sharing proposal, but he declined to discuss the terms because the matter still is being negotiated.
He added that the trustees aren't scheduled to meet again until March 20, and it's likely the proposed JEDZ won't be addressed until then.
In the meantime, Reardon confirmed that Grandview Heights also has approached the township with its own offer to create a JEDZ.
"Basically, we're trying to figure out what the best fit is for the township," Reardon said.
He acknowledged the funding split is significant because the township is seeking to increase revenues in the face of local government cuts by the Ohio General Assembly.
"It's a major part of it," he said. "All municipalities have declining revenues because of the cuts to local government funds.
"We're just trying to keep our heads above water."
Although Upper Arlington has an operating budget of approximately $28.8 million, it has seen its share of annual local government funds shrink from about $5 million five years ago to an anticipated $1 million this year.
The Ohio General Assembly also eliminated estate taxes this year, a source of revenue that city officials have said provided Upper Arlington with an average of $4.8 million each year.
Additionally, Upper Arlington is a landlocked city with no undeveloped commercial properties. So, Lamb said, city officials have had to look outside city boundaries for new revenue streams.
"Clinton Township's close proximity to the city and the existing relationship the city shares with the township makes them an ideal partner for this type of agreement," he said. "Further, we believe that due to recent tax policy changes in the state that now is the time for the city and the township to strengthen and grow our relationship."