Against the CRA

Editor:

The new Community Reinvestment Act approved by the city of Columbiana raises several significant issues.

The first involves the city’s ability and intent to provide millions of dollars in tax abatements. For example, people building a new house in Firestone Farms or Old Saybrook would receive a tax abatement of $60,000 or more. Higher end homes would qualify for even larger abatements. The newly proposed triplex, rental units would receive abatements of about $90,000 per unit. If the proposed 14 units are built, the tax abatement would be around $1.2 million.

Getting some new neighbors would be nice, but not at these prices. The amounts are outrageous.

Why the high price tag for the abatements? The abatements represent up to 100% of the real estate tax on a property for up to 15 years. That means people receiving max incentives won’t pay any real estate tax until 2034. How old will you be in 2034?

The CRA will also result in the city waiving real estate taxes for other government entities as well. Local schools, parks, children services, developmental disability agencies, libraries, etc. will also be affected. Some of these agencies government entities that have pushed back concerning the CRA have been branded as being shortsighted or impatient. I think I would be impatient too if someone told me to go stand in line for 15 years and wait for my money.

It’s understandable the city would prefer to see undeveloped properties become developed properties and generate more tax revenue. But why can’t more reasonable tax abatements be offered? Perhaps $20,000 to $25,000. Surely this should be a sufficient sweetener to get people to seriously consider building in Columbiana. We are the best little town in Ohio, right? If the abatement period was also reduced to five years or so, these properties could quickly revert back to full tax paying status and all government entities would benefit.

This potential new real estate tax revenue is the property of the residents of Columbiana. It should be respected and protected. Just because it isn’t currently being billed or collected, doesn’t mean it should be used by the city to subsidize future economic development. This is not a proper role for city government especially at these high levels. If additional incentives above the more modest $20,000-$25,000 level are needed, let the landowners and builders provide them.

At a recent city council meeting members said they intend to review the plan in December to determine if any changes are necessary. By that time millions of tax abatements will have been approved and passed out like candy at the Columbiana Christmas parade. The time to take stock of the program is now. The incentives should be halted immediately and the program reviewed.

These deals may meet the terms of the CRA and the state of Ohio, but that doesn’t make them a good deal for the city or residents. The city and the taxpayers deserve the best possible deal. This clearly isn’t it.

Joe DeMay

Columbiana

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