WEST CHESTER TWP. — The Princeton City School District must pay West Chester Township about $10 million in tax-increment funds for the past 12 years, the Ohio Supreme Court unanimously ruled Wednesday.

        The decision stems from a dispute over a tax zone covering 80 acres in the township just inside Princeton's school district from Crescentville Road to International Boulevard to Mulhauser Road.

        The zone was created in 1990, but Princeton schools didn't pay the township the taxes, which are about $600,000 a year, West Chester Township Administrator Dave Gully said Wednesday.

        The township filed suit against Princeton in 1998 after the school district filed an objection with the Ohio Tax Commission to paying the money.

        But Wednesday's ruling means the township can use the tax increment from the zone to pay for public projects within West Chester.

        “The decision is huge,” Mr. Gully said Wednesday. “It's as we expected and patiently waited for.”

        The $10 million will come from taxes paid on commercial real estate in West Chester located in the Princeton School District, he said.

        Township officials spent about $200,000 on the suit.

        Princeton Schools have not been escrowing the money, Mr. Gully said, so township officials will meet soon with Princeton district leaders and Butler County's auditor to work out a payment plan.

        An attorney for the school district and school officials could not be reached for comment.

        Tax-increment funding is a method of paying for public improvements in an area slated for redevelopment by recapturing, for a time, all or a portion of the increased property-tax revenue that may result if the redevelopment stimulates private investment.

        For example, a municipality may redevelop an area surrounding a public square by installing public improvements, such as fountains, benches or a parking garage, and pay for them with the recaptured tax-increment funds.

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