Tuesday, October 7, 2008

Selfish City Costs State


By Mark Stewart

For the last two years, as Lorain County auditor, I have felt obligated to fight against the city of Lorain’s retroactive tax-abatement program because it’s illegal, unfair, arbitrary, and harmful to county residents and institutions. The city of Lorain has found a way to shift its tax responsibilities to the rest of the state. Now, I feel obligated to bring this program to broader attention as it threatens to harm to all Ohioans.

In 2006, Lorain’s city council amended its previous tax-abatement ordinance to begin offering 15-year, 100 percent property tax abatements on homes on the city’s west side, most of which were already built and occupied, in return for exorbitant fees averaging $7,000 per home.

Basically, new home owners can pay a one-time application fee in lieu of paying property taxes for 15 years. Good deal, right? For the city it certainly is, because the money paid to get abatement is a "fee" and not a "tax." Under this scheme the city gets its hands on a windfall that doesn't come with requirements to fund services. So that means less money provided for education. Less money provided to libraries. Less money provided to programs serving the developmentally disabled. Property taxes come with specific allocations, but this "application fee" won't. So it's a sweet deal for the city, because without those required allocations they are free to shortchange on public services.