See Mike Lemon’s, Administrator For Columbia Township, comments on the bottom of the page detailing Mariemont’s lost opportunity
In 1993, the Ohio General Assembly passed legislation enabling local communities to create Joint Economic Development Districts (JEDD). A JEDD agreement enables townships, cities, and
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villages to cooperatively address concerns associated with diminishing local revenues, economic development, growth, and annexation pressures. Technically, a JEDD becomes a local community approach to solving economic development issues by providing local governments the ability to enter into legal agreements that will increase revenues and create jobs. The contractual agreements, which vary from jurisdiction to jurisdiction, have become a significant economic development tool for local communities since JEDD authorization in 1993. Read more for clarification of the issues in regard to Mariemont and Columbia Township.
An Email received by one of the Editors at Mariemont.com expresses concerns about a JEDD. “Help me understand why the Village of Mariemont would want to get involved in leveraging earnings taxes on employees in Columbia Twp. Since Townships are prohibited from leveraging earnings taxes, currently workers are exempt from these taxes. Our involvement, other than perhaps some modest monetary self interest, creates a ‘taxation without representation’ for employees at the Promenade and Ridge / Highland. The JEDD thing seems to me to be a loophole for Townships to get around their inability to tax earnings. The employees and businesses at the Promenade, etcetera, likely aren’t wildly in favor of this. I think also that the collection of these earnings taxes would rest on Mariemont…and the Village would receive fractional compensation. It is the policy aspect (i.e., the tax loophole) that most concerns me. Your thoughts?”
Comments:
First an overview of The JEDD Legislation:
Advantages for a township
- Because townships are not permitted to collect income tax, the JEDD provides the ability to increase revenues in the form of income taxes and increased property taxes on previously vacant land.
- The JEDD agreement prohibits annexation by the city or village for a minimum of three years and creates a cooperative arrangement with the city or village.
- The increased revenue provides township officials a new funding source that will provide additional services to its residents at no further cost.
Advantages for a city or village
- The JEDD agreement enables a city or village to increase its income tax revenues.
- The agreement typically extends infrastructure utilities, therefore generating additional revenue.
- The JEDD creates a cooperative arrangement with the township in solving local economic issues.
In the Editor’s opinion, the benefits of collaboration, consultation and cooperation attendant to a JEDD outweigh the economic benefits to both the Village of Mariemont and Columbia Township. For too long, the governance of these two entities have been at odds and it is time they begin to negotiate for the greater good on issues such as infrastructure, gentrification, shared services and long range planning.
“Collaboration, consultation and cooperation” sound good to me. I favored annexation of the area which became the Promenade decades ago. It seems to me that shortsighted thinking — prevalent at the time and while ostensibly geared toward protecting our village — has had just the opposite effect. A JEDD may be a good way to go.
Regarding the e-mail received by an editor expressing concerns about a JEDD:
“Why would Mariemont want to get involved in leveraging (sic) earnings taxes on employees in Columbia Township?”
The purpose of a JEDD/JEDZ is for community partners to promote economic development that benefits both communities and provides revenue for public infrastructure and other services for the partnering communities. With all the revenue cuts by the State and elimination of the estate tax, Mariemont could utilize the revenue it receives for these purposes without having to ask its residents for increases in earnings taxes or property taxes.
“Our involvement creates a “taxation without representation” situation for employees at the Promenade and Ridge/Highland”
Does Mariemont create taxation without representation for employees working in Mariemont and taxed by Mariemont, but who do not live in Mariemont? What representation do they have? How would the situation in Columbia Township be any different than what Mariemont does?
Why should non-resident employees working in a township, utilizing its infrastructure and services, paid for by the residents of the township, pay earnings taxes to the community where they are domiciled when they don’t work where they live? This is tantamount to townships subsidizing municipalities income while the townships bear the cost burden of roads and services for those employees?
“It is the policy aspect (i.e. the tax loophole) that most concerns me.”
JEDDs and JEDZs are a purposeful creation by the State, not a tax loophole, for promoting economic development and community improvement, benefitting both townships and municipalities. As the state continues to cut back its assistance and revenue to communities, it is likely we will see more tools such as JEDDs/JEDZs being created by the legislature.
“I think also the collection of these earnings taxes would rest on Mariemont…and the Village would receive fractional compensation.”
By law, the partnering municipality in a JEDD/JEDZ is required to collect the taxes.
The Village would receive not only compensation (amount to be negotiated) for tax collection as required by law but also a percentage of the revenue generated based upon a negotiated agreement. The percentage is usually based upon the involvement and level of services provided by the municipality. The smaller the contribution of services, the smaller the percentage normally.