A proposed state law that would exempt some township fire and EMS districts from municipal-approved tax-increment-financing agreements could make TIFs ineffective for cities, according to Hilliard Mayor Don Schonhardt.
"If (the Ohio legislature) doesn't want to endorse economic development, then they should just do away with TIFs," Schonhardt said.
Conversely, representatives for local townships that provide fire-suppression services for cities -- such as Norwich Township Trustee Larry Earman -- say the bill would balance the playing field.
"What's fair is fair," Earman said.
A TIF is an economic-development mechanism available to local governments to finance public-infrastructure improvements and, in certain circumstances, residential rehabilitation, according to the Ohio Development Services Agency.
A TIF locks in the taxable worth of real property at the value it holds at the time the authorizing legislation is approved, diverting the incremental revenue from traditional property-tax-collecting entities to designated uses, such as funding the necessary improvements or infrastructure to support a new development.
Schonhardt said the Ohio House of Representatives' House Bill 69 would exempt fire and EMS districts from having any of their property-tax revenue redirected.
"It would eliminate the value of TIFs," he said. "Once you take enough money away (from the TIF), there isn't enough left to undertake anything of value."
Schonhardt said he could not quantify potential negative effects because each TIF is uniquely structured.
"One would have to know the value of the project and the cost of the infrastructure improvements to determine whether the reduced cash flow from the project would pay for the infrastructure," he said.
HB 69 follows other requirements, such as negotiating TIF agreements with other entities, thereby eroding the effectiveness of TIFs since the legislature established the TIF program about a decade ago, Schonhardt said.
Not surprisingly, HB 69 has the support of area townships.
Norwich Township trustees last week approved a resolution in support of the bill.
Earman has been a critic of how Hilliard uses TIFs to finance infrastructure, especially in the case of primarily residential projects.
Earman, along with Hilliard school board member Andy Teater and City Councilman Les Carrier, led a successful campaign for the Issue 9 charter-change amendment, which voters approved last March to prohibit rezoning by emergency action of Hilliard City Council and nix the use of TIFs for residential developments or those with residential components.
"We expect pushback from the city," Earman said.
Hilliard has approximately 45 TIFs on the books, according to finance director David Delande.
Some have been deployed for such projects as the construction of Trueman Boulevard and the Landmark Lofts development.
Washington Township administrator Sara Ott said HB 69 has her township's support and its trustees also approved a resolution of support.
Five townships -- Jackson, Madison, Norwich, Plain and Washington -- have met to discuss proponent testimony at the Statehouse and to plan overall strategy, according to an email from Ott to Dorothy Hildabrand, legislative aide to Rep. Bob Cupp (R-Lima), sponsor of HB 69.
A former Allen County commissioner and Ohio Supreme Court justice, Cupp said he sponsored the bill in reaction to townships that expressed concern about the loss of property-tax revenue through TIFs while being tasked with providing the same -- or even additional -- EMS and fire support.
It is the same argument Earman and Norwich Trustee Tim Roberts, a retired firefighter, have reiterated when opposing some of Hilliard's TIF agreements.
Former Rep. Cheryl Grossman (R-Grove City) said she approached Cupp last year about the proposal during her final year at the Statehouse.
Grossman said while she was mayor of Grove City, she worked to ensure that the Jackson Township Fire Department "was made whole" when negotiating TIFs.
"It's a matter of fairness and equity," said Grossman, adding that she did not think other townships fared so well as a result of municipal-approved TIFs.
The proposed law is not retroactive and would apply only to TIFs brokered after the law would become effective, Cupp said.
"It only applies to future TIFs," he said.
It also applies only to townships that provide fire-suppression service to a municipality, Cupp said.
The proposed law would not exempt a municipal-operated fire department from a TIF enacted by the council of that same city, he said.
An example in suburban Franklin County is Whitehall, where the city receives EMS and fire protection from the Whitehall Division of Fire.
Cupp said although the practice of how TIFs are employed is not an issue in the district he represents in northwestern Ohio, he sees merit in the concerns that Grossman communicated last year.
HB 69 currently is in the State and Local Government Committee.
Proponent and opponent testimony for the bill was scheduled in committee at the Ohio Statehouse on March 15, according to an aide for Cupp.
Washington Township Trustee Denise Franz King said on March 13 that she planned to testify in support of the measure.
"It's a small change in a law to avoid an unintended consequence (of diverting tax dollars voters approved for a fire department) to build parking garages and roads," King said. "It's always easier to spend other people's money."
Rep. Jim Hughes (R-Upper Arlington), who represents the 24th Ohio House District that covers Hilliard and much of western Franklin County, said he is not a member of the committee considering HB 69, but he is observing its legislative activity.
"While I do not serve on the committee that is vetting House Bill 69, I am paying close attention to the legislation and continue to communicate with my colleagues and constituents throughout the committee process," he said.