Tuesday, April 20, 2004

Tax rule might kill Butler road projects

Tax-increment financing would build Liberty interchange

By John Kiesewetter
The Cincinnati Enquirer

HAMILTON - The news couldn't have come at a worse time for Butler County Commissioner Michael A. Fox.

As he was looking into using new housing starts to pay for highway and other infrastructure improvements, the Ohio tax commissioner essentially has taken the tool out of his hand.

"This will shut down or delay every single major highway improvement we have in Butler County. It will basically be a nightmare," Fox said Monday.

Fox was referring to a change in state interpretation about tax-increment financing districts, the method used to build the Union Centre/Interstate 75 interchange and widen Cox Road near the Voice of America property. Commissioners plan to use tax-increment financing to build the $20-million Liberty interchange at I-75 and Hamilton-Mason Road.

Under the old way, a city, township or county government could declare an area - such as Union Centre - to be a tax-increment financing district. But now, Ohio Tax Commissioner William W. Wilkins has ruled that every property owner must agree to be in a tax-increment financing district.

The new ruling will "cripple... one of the most important capital improvement financing tools available to local government," Fox said.

Butler County commissioners Monday said they will contact legislators and Gov. Bob Taft, asking to overturn the new ruling.

Gary Gudmundson, Ohio Department of Taxation spokesman, acknowledged that the new interpretation puts "an awful burden" on local governments. But it also allows every taxpayer to have a say in how taxes are spent, he said.

The city of Cincinnati also is grappling with the problem. It planned on tax-increment financing to pay for millions in projects, including the Banks on the riverfront.

For the past decade, communities throughout Ohio have used tax-increment financing to pay for improvements in an area using anticipated increased tax revenues - the tax increment - from the district. The tax payments - called "service payments" - go into a special improvement fund, not the general fund. Governments sell bonds based on the revenue stream from service payments.

Under questioning from Catherine Stoker, the West Chester Township trustee running against Fox for commissioner in November, Commissioners Greg Jolivette and Fox Monday confirmed that the county has been investigating creating tax-increment districts for new residential growth in the townships to pay for roads and other improvements. Stoker complained that township trustees had not been informed about the county's plans.

"It's worth exploring," Jolivette told Stoker. "It doesn't mean the commission is going to approve it. But if you don't look at all possibilities, you miss an opportunity."


E-mail jkiesewetter@enquirer.com

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