How Columbus paying school districts helps economic development

COLUMBUS, Ohio (WCMH) -- The City of Columbus is paying surrounding school districts nearly $6 million, which is related to agreements concerning economic development and job creation.

The city has an initiative for certain qualifying companies building in Columbus; if they are a part of the program, they get certain tax breaks. The goal is to bring more companies to Columbus and the tax breaks help incentivize this.

Companies still have to pay property tax, but they only pay a portion of the tax on the property improvements. That money usually goes to schools, but instead of districts missing out, the city then gives money out of the general fund to the districts where these businesses are building.

The legislation reads: "Per Ohio law, the city is required to pay affected school districts 50% of the municipal income tax revenue attributable to tax abated projects where the annual ‘new employee’ payroll for a project is one million dollars for an Enterprise Zone (EZ) or for a Community Reinvestment Area (CRA) two million dollars or more, in a given tax year, during the abatement."

"It is about bolstering jobs, but it's also about that long-term investment and how we'll intentionally make a change in our school districts and our communities as a whole," Columbus City Councilmember Nick Bankston said. 

Columbus has 55 agreements with seven school districts, including Columbus City Schools, Gahanna-Jefferson, Hilliard and Olentangy.

"I think about Rouge Fitness, which is a great organization that was developed on a brownfield site that had stood empty for decades,” Bankston said. “Because of that agreement, they were able to come here.” 

The city meets with the businesses receiving these incentives each year to make sure they are meeting expectations so the city and residents are getting a return on their investment. 

"I know that since I've been on council, we've done a lot of things like up the number that you have to pay to workers; you have to pay at least $20 an hour,” Bankston said. “You have to have health care and some type of form of retirement in order to even be considered for an incentive.”

During Monday's council meeting, one speaker spoke out against this, saying that while he is aware the city is following the law, this money should be allocated elsewhere and school districts are losing a lot of money because of this. He also pointed to rising property taxes and called the tax abatement incentives "ridiculous."

The Director of Development for Columbus said that these projects are choosing the city because of the tax incentives, and the community would be losing out if the businesses did not come here.