SYCAMORE TWP., Ohio - A proposal to begin taxing employees who work in Sycamore Township – but who don’t live there – is being greeted skeptically by some local businesses.
The areas being targeted for the new tax include such major employers like Kenwood Towne Center, several shopping centers and F+W Media.
In all, thousands of workers could be affected.
Sycamore Township trustees recently approved the creation of three Joint Economic Development Zones -- or JEDZs -- as a way to generate more revenue for the township’s coffers.
Now the proposal must be submitted to township residents for their approval. The issue likely will appear on the May 7 primary ballot. If approved, it would take effect Oct. 1.
Under the proposal, a 0.75 percent income tax would be imposed on businesses and employees in the zoned areas. The tax, however, would be rebated for township residents.
The tax is expected to raise between $2 million and $3 million annually for the township.
Sycamore Township Administrator Bruce Raabe told 9 On Your Side the JEDZ is needed because of cuts in funding from the state of Ohio. The state has reduced the amount of Local Government Funds it disburses to communities, and eliminated certain estate taxes altogether.
As a result, the township was facing a $3.6 million budget shortfall, Raabe said.
To help offset the loss, township officials have renegotiated the contract with firefighters to save $1.5 million, and delayed some road projects to save $750,000.
But more money still is needed to close the gap and the JEDZ is the best way to do that, Raabe said.
"Decisions in Columbus have resulted in some loss of revenue to us from the state level -- the elimination of the estate tax, local property tax, tangible personal property tax," said Township Trustee Dennis Connor. "And, so townships have been forced to find new and creative ways to sort of replace holes in their budgets."
That idea doesn’t sit well with Jim Wycoff, co-owner of a Raymond James Financial Services office in Sycamore Township.
Wycoff moved his office to Hosbrook Road in the township after spending a decade in downtown Cincinnati specifically to avoid this type of earnings tax, he said. The office employs four people and an intern.
"We just renewed our lease last year and one of the decisions on our renewal was no income tax," Wycoff said.
Wycoff hadn't heard about the tax proposal until informed by 9 On Your Side. He has mixed feelings about the measure.
"First of all, that's real money," Wycoff said. "Three-fourth of one percent on $50,000 is about $350 and secondly -- it could be a factor in terms of recruiting and retaining people and it all factors in to our bottom line at a time when we have more and more costs in terms of taxes and other regulations."
He added, "On one side, it's a negative for attracting new employees and retaining current. On the other side, one of the things we enjoy here are good highways, good roads, good access for our clients and for us."
But Connor said the income tax is a better option for residents than a new property tax.
"That's the intention, yes, that they would be used for infrastructure and for economic development purposes within the business districts where they are collected, but they will go into the general fund," Connor said.
"It's a positive thing because it encourages economic development without penalizing the residents with an additional property tax," he added.
Ohio approved a law to let townships create JEDZs in 1993. They are designed to let townships, villages and cities cooperatively address concerns stemming from shrinking local revenues, costs connected to growth and annexation pressures.
JEDZs allow revenue sharing between townships and nearby cities that administer the deal. Under the arrangement, a city can oversee tax collections and keep part of the money.
If approved by voters, Sycamore Township’s deal would involve revenue sharing with Amberley Village and Madeira.
The two communities would get a flat 3-percent collection fee, along with 10 percent of remaining revenues. That amount is estimated at between $50,000 and $100,000 annually.
9 On Your Side and WCPO Digital will update this story as more information becomes available.
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