LAW DIRECTOR DISAPPOINTS 

Comments by Grove City Law Director Stephen J. Smith last night left little doubt that he is a mouthpiece for Mayor Ike Stage when it comes to tax incentives and abatements for real estate developers.

Smith’s remarks, which In My Opinion believes were misleading and full of half-truths, came during the second meeting of the data center task force (Aug. 19).

Smith is a Stage appointee and a member of the mayor’s administration. But the law director repeatedly claims his legal advice is unbiased and not influenced by Stage’s positions on political issues.

To some, Smith’s remarks last night told a different story.

Community Reinvestment Area (CRA) and Tax Increment Financing (TIF) incentives cost homeowners “nothing,” Smith told the task force. Property levies don’t increase because of these tax breaks, he added.

When confronted after the meeting, Smith doubled down. Even Franklin County agencies that are supported by property taxes don’t lose money because of CRAs and TIFs, he contended. “Not one penny,” he declared.

For years, Mayor Stage has made similar misleading remarks about tax giveaways to wealthy developers. (By the way, developers and their lawyers are some of Stage’s most reliable election campaign donors.)

In fact, CRAs and TIFs have cost school districts; the Jackson Township fire department; the Southwest Public Libraries; Metro Parks; the Columbus Zoo and Aquarium; and Franklin County agencies that serve sexually abused children, orphans, drug and alcohol addicts, the developmentally disabled, mentally ill and low-income elderly millions of dollars in lost property tax revenue.

And because of this lost revenue, these agencies are forced to ask homeowners to approve higher property taxes more frequently. For example, a property levy increase in 2020 for the Jackson Township fire department was needed, in part, because of lost revenue from tax breaks, supporters argued.

Officials of property tax-supported agencies complained so often about lost revenue that  state legislators imposed limits on cities’ ability to grant CRAs and TIFS that affect school districts and township fire departments.

Also, Franklin County commissioners have complained repeatedly that agencies serving the area’s most vulnerable have lost millions because of tax breaks like those granted by Grove City.  

But Smith failed to inform task force members of any of these down sides

Mayor Stage routinely uses the same misleading tactics: Pump up the economic development benefits of tax breaks but never mention the negatives. Both Smith and Stage apparently hope the public, including task force members, haven’t read any of the numerous news reports in recent years about Ohio’s tax-break controversy.

There are many other reasons to oppose tax breaks for developers and multibillion-dollar businesses. Following are just a few: (Of course, these reasons are never mentioned by Smith or Stage).

• Voters – in countywide elections – approve property tax increases to support specific agencies like Children’s Services; Alcohol, Drug and Mental Health Board; Senior Options; libraries; etc. Yet, a handful of city officials – mayors and city council members – can overturn the will of the people and use that voter-approved tax revenue for completely unintended uses – tax breaks for developers and other businesses.
• City officials pick winners and losers in the business world. One housing developer or business owner gets tax breaks while his/her competitor doesn’t. Such cronyism can lead to public corruption and erode the voters’ trust in their elected officials.
• Virtually all housing and business developments result in increased costs, including fire protection and emergency health services provided by paramedics. But with tax breaks, none of the money homeowners pay in lieu of property taxes goes to township fire departments.
• Stage and Smith repeatedly note that tax breaks eventually expire. But City Councils, at the urging of mayors, can extend the life of these giveaways. Grove City council members did just that with the TIF for the Pinnacle housing development. Several months ago, the Council approved extending the Pinnacle TIF for another 15 years to help pay for construction of a proposed community center.
• Mayors and city councils embrace CRAs and TIFs because the lost revenue doesn’t deplete city treasuries. Instead, property-tax supported agencies like those mentioned above are the losers.
• Although tax breaks eventually result in higher and more frequent property  levy requests, city officials don’t get blamed, even though they’re often at fault. Why?  To compensate for revenue lost to tax breaks, officials of Children’s Services, Metro Parks, Senior Options, etc. are the ones forced to ask for higher property taxes more frequently. City officials can shed crocodile tears and falsely claim to be innocent bystanders. “I feel your pain,” these city officials can tell voters. “But it’s not my fault.  I’m not the one raising your taxes.” 

Bottom Line: Tax breaks for developers and other business people can result in some economic growth. But all too often the minuses far outweigh the pluses. That’s why it’s  important for City Hall to level with Grove City homeowners – and members of the task force. Don’t try to pull the wool over our eyes.

Half of the 16 members of the task force are civilians who do not hold elective office. Many of these members are unfamiliar with the intricacies of city government. Because of this, most of last night’s meeting was devoted to educating the task force on land-use issues. Development Director Kyle Rauch and his aides, Smith and Council Clerk Tami Kelly  walked task force members through the Byzantine process of annexations, rezonings and other land-use issues.

The task force is counting on these officials to give them the facts. The pros and cons. The good, the bad and the ugly.  Smith’s performance last night involving tax breaks did not live up to those expectations. Not by a long shot.

Fortunately, the four council members who attended last night’s meeting didn’t follow Smith’s lead. Instead, Council members Mohamed Omar, Melissa Anderson, Jodi Burroughs and Alan Sturm asked penetrating questions. They criticized the Development Department for failing to keep the public adequately informed of land-use developments. Each council member played the admirable role of honest broker. 

Another promising development: Cynthia J. Sgalla, an attorney and deputy court administrator of the Franklin County Court of Appeals, was unanimously elected chairperson of the task force. Her court duties include personnel, IT, purchasing and assisting the court administrator in drafting judicial opinions. She earned her law degree, magna cum laude, from Capital University in 2000 and her bachelor’s degree in pharmacy from Ohio State University in 1996.

Sgalla is obviously experienced in separating the wheat from the chaff.