Critics: Springfield Twp. JEDZ might have adverse effectsWritten by Caitlin McGlade | | email@example.com
Springfield Township’s latest proposal to bring in revenue might increase income taxes for some, redirect taxes for others and affect business taxes for hundreds of shops around Airport Highway.
The move could help fill a gap for a township that lost 16 percent of its property tax income just within the past year and barely has enough to fund a sheriff’s deputy in the coming years, said Leslie Kohli, township administrator.
The solution, called a Joint Economic Development Zone (JEDZ), would enter Springfield Township into an agreement with Holland to start collecting taxes on businesses within the township in designated areas.
The zone is spread out across portions of Airport Highway and stops at Holland-Sylvania Road. It includes, among many others, places such as Spring Meadows Shopping Center and the area around Old Navy and Gander Mountain.
Springfield Township citizens would have to vote the zone into effect next May or November. Rob Lusak, an Ashley Furniture Home Store employee, is trying to stop the proposal before it makes it to the ballot.
“This is going to affect well over 100 businesses and 1,000 employees and many people live in other cities,” Lusak said. “Once this gets on the ballot, it might be pretty popular with people who don’t work at Spring Meadows — you’ve got other people to pay your taxes for you.”
He and some other employees plan to start canvassing the potential zone to drum up support from other businesses. His goal is to pack Springfield Township’s public hearing on Jan. 3. Holland will also host a meeting Jan. 4.
The deal would pull in 1.5 percent of employees’ income taxes and net profits of each business in the zone. Springfield would receive 78 percent of the revenue, while Holland would receive 22 percent.
Lusak would not see a tax increase because he is already paying income taxes to Holland, where he lives. But if an employee lives in a township that does not collect income tax, he or she would see that 1.5 percent income tax hike.
Increase or not, Lusak said he doesn’t want the citizens of Springfield deciding where other people’s taxes are going.
“They don’t want to see their tax money siphoned away into the boonies,” Lusak said.
Deflecting some income tax away from employees’ home cities might have a negative effect on Toledo’s tax revenue, said Toledo City Councilmember Rob Ludeman, who is chair of the economic development committee.
Whether Toledo would notice a change depends on how many Toledo residents work in the zone. For now, it’s too soon to tell what the potential effects might be, Ludeman said.
Kohli said the township is just catching up with how most municipalities collect income taxes. State law does not permit townships to collect income tax or administer their own taxes, which makes forms of income difficult especially in the slow economy.
“When townships were developed, they were large pieces of land with few people because most of them were large family farms so the whole concept of three trustees and not having these services didn’t matter,” she said. “People have tended to move out of the urban areas and into the suburbs and as they do, it’s almost as if we’ve become a small city without the authority of a city.”
Establishing a JEDZ is an option to remedy that problem, Kohli said.
Springfield and Holland would not be the only beneficiaries of the money. Ten percent of the total income tax collected would be reserved for a “Maintenance Fund” for the business district, according to the proposal.
The fund, which has a cap of $1.5 million, would cover new infrastructure costs, help new businesses and generally develop the zone, said Andy Glenn, trustee chairman.
A six-member board of directors, comprised of three from Holland and three from Springfield, would control the JEDZ and could raise or lower the cap at any time. The directors could also expand the zone without a citizen vote, Glenn said.
Mike Yunker, the mayor of Holland, said the deal has benefits for businesses too because of the maintenance fund. Increased car break-ins and crime have provoked worry among business owners and managers, he said. Having the fund could help clean up the area and show that the township can provide for businesses’ needs, he said.
The Holland-Springfield Township Chamber of Commerce does not know enough about the proposal to decide whether it’s a good or bad move for businesses, said Pat Hicks, executive director of the chamber.
Kohli said the township is “not trying to keep anyone in the dark” and that she is working on a comprehensive list of all the businesses in the area before she can educate everyone involved.
Trustees have talked about the concept for a while but it became reality when township citizens voted down a levy that would have funded more sheriffs’ deputies last month, Kohli said.
Last year, the Lucas County Sheriff’s Office announced it could no longer provide free deputy services to townships. The township now has one deputy that costs $415,000, which is only a portion of how much the deputy costs the office. Springfield will have to pay more until it reaches the full amount, which will get difficult given strapped revenue sources, Kohli said.
The money accumulated from the JEDZ would dump into the general fund and has no specific purpose as of now, Glenn said.
“We’ve cut everything extra out of our budgets, we’re just trying to ease the impact,” he said. “We’ve cut back to the basics and unfortunately we’re at a point where either services are going to be cut to our residents or we’re going to have to find a source for our tax dollars. We think that this is a better solution than placing the burden on the taxpayers.”