The Town of Worthington begins collecting tax revenue for the Township of Sharon as part of a Joint Economic Development District.
On September 20, the city council created a special JEDD income fund with the aim of collecting tax revenue.
“Worthington will collect income tax for the Township of Sharon,” said board chair Bonnie Michael. “We will receive a fee for our processing, then the majority of the income tax will go to Sharon Township.”
The arrangement will apply to around $ 3 million in payroll for workers employed in the JEDD zone at the Olentangy Valley Center shopping complex, according to Worthington executive assistant Ethan Barnhardt, who is the city’s representative to of JEDD and vice-president of the board of directors of JEDD. .
The 2.5% tax rate is expected to generate about $ 75,000 per year, he said. Of that amount, about $ 60,000 will go to Sharon Township and about $ 15,000 to Worthington for the maintenance and administration of the JEDD, Barnhardt said, although there is still additional revenue for the town after the fees. administrative.
“It’s a win-win solution for both communities and it further deepens our collaborative relationship,” said Barnhardt.
The arrangement was due to start on October 1, he said.
Barnhardt said townships are unable to collect income taxes under Ohio law, and the JEDDs help fill in the gaps and help townships meet their economic development goals.
“The JEDDs were created so that the townships and municipalities can collaborate and agree to extend the fiscal authority of municipalities with the aim of facilitating economic development within the township,” said. “The main advantage for the township is that it does not have to annex its land and that it can start collecting part of the income from income tax that otherwise would not have been collected in the area. unincorporated area. “
The JEDD was created on July 20, 2020, when city council voted to allow City Manager Matt Greeson to enter into a contract with the Township of Sharon, Barnhardt said.
It is an extension of the city and township partnership in which the city provides fire extinguishing and emergency medical services to township residents and businesses.
Sharon Township approved the JEDD in May, according to administrator John Oberle, who is a member of the JEDD board.
Barnhardt said the JEDD was created to “help facilitate economic development and create jobs and economic opportunities” within its borders.
He said the JEDD consists of five plots in Sharon Township at the Olentangy Valley Center – a commercial development in the township off Highway 315 just north of Interstate 270, which is due to be redeveloped in recent years. and received tax incentives from Franklin County in 2018 to stimulate redevelopment of the site, as reported by The Columbus Dispatch in February 2018. These plots include the Hills Market at 7860 Olentangy River Road, the new Bristol Senior Living facility at 7780 Olentangy River Road and several other businesses.
“Worthington and the Township of Sharon have always had a close bond, and it was a logical way for Worthington to help the Township in the redevelopment of the Olentangy Valley Center by generating new income for the Township,” said Barnhardt.
Because the commune was waiving taxes in the Center of the Olentangy Valley as a result of the tax incentives, Oberle said, JEDD was needed to help recover some of that income.
“We are comfortable with this, but we also have a duty to our residents to make sure (that) if we are going to forgo certain tax incentives, we thought that one way to compensate was to create the JEDD”, did he declare. noted. “I anticipate this will help us with some of the costs that have been lost for investment in the development. And it will go to other township costs that are ingrained for the benefit of our residents. It will be a win-win.
“It won’t be a godsend, but it will help us with our budget.”
Oberle said the township was not losing any income because of the tax incentives.
Sharon Township’s annual operating budget for the current fiscal year is approximately $ 3 million, he said.
According to Barnhardt, taxes levied on an employee in JEDD must be withheld by the employer. If there is a tax in the municipality where that person’s residence is located, that municipality can choose to give full or partial credit for taxes paid at a workplace, he said.
“The logic behind this tax system is that people pay taxes where they live and work because they use city services provided both at the workplace and at residence, such as driving. , police and firefighters, ”he said. “If a person works in Sharon Township but does not live there, it is very likely that the employee is already taxed on their income elsewhere.
“With the JEDD, the income tax which was previously withheld where the employee lived would be redirected to the JEDD to cover the costs linked to the redevelopment of the Center de la Vallée d’Olentangy.”
Oberle said tax incentives for owners of Olentangy Valley Center, Columbus-based Continental Real Estate Cos., Include a district tax increase funding through the township and an incentive for the community redevelopment through Franklin County.
Oberle said TIF is redirecting money that would normally be paid in taxes to infrastructure development in support of the site. The CRA “provides property tax exemptions for homeowners who renovate existing buildings or construct new buildings,” according to ohio.gov.
The redevelopment of the center of the Olentangy Valley is complete, with the exception of a plot on the north side of the site which is still under development, Oberle said.
A Sheetz gas station and convenience store were offered for this plot, but Sheetz announced that it had withdrawn its proposal in August 2020.