43
Cities discuss new-business tax
The three cities would split the income tax revenue.
YOUNGSTOWN — While Youngstown tries to sell — unsuccessfully so far — an economic plan to Austintown and Boardman, it’s talking with Struthers and Campbell about sharing income taxes from new businesses along a portion of the Mahoning River.
Youngstown is asking the city councils of Campbell and Struthers to approve resolutions allowing Youngstown to pay for a study that would determine the economic potential of a joint economic development zone or JEDZ.
The potential JEDZ would consist of about 1,200 acres of undeveloped land along the Mahoning River known as the Mahoning River Corridor of Opportunity in those three cities.
About 550 acres of that former mill-dominated area is usable for development, said Youngstown Mayor Jay Williams.
“There’s been some development in the MRCO, but not the amount we’d like,” he said.
The Youngstown proposal calls for the three cities to evenly split a 2-percent income tax that would be imposed on only new businesses in the MRCO, Williams said.
A main component of the plan would be the use of Youngstown water in the JEDZ, Williams said.
Struthers and Campbell use water from Aqua Ohio, a private company. Campbell operates its own plant that treats water from Aqua, and then resells it to the company.
Campbell Mayor John Dill endorses the idea of a study saying, “It doesn’t hurt to listen. It doesn’t cost us anything. We’ll want to see what the study says first.”
Struthers Mayor Terry Stocker isn’t as receptive as Dill to Youngstown’s idea, however.
Youngstown is “looking at water,” he said. “We’re here to listen and be open-minded. We want to talk further, but we don’t want to give up an old friend [Aqua Ohio] for a new friend [Youngstown]. We’ve been with Aqua Ohio for years, and we’re pleased with their service.”
Once Youngstown gives the resolution to Struthers, council would need time to consider it, Stocker said.
Youngstown’s proposal for a joint economic development district — JEDD — with Austintown and Boardman has met with opposition from trustees in those townships.
A JEDD is established between a city and townships under state law while a JEDZ is between cities.
There are major differences between the two proposals.
The JEDD calls for Youngstown to impose a 2 percent income tax on current and future businesses in the townships that receive city water. The townships could assess their own 0.25 percent income tax on those same residents.
If a JEDZ is established with Struthers and Campbell it would only be undeveloped acreage in the MRCO. Also, the three cities would share the income tax revenue.
“Water is an extremely important part of this,” Williams said.
Also, Struthers and Campbell are municipalities with current income taxes, 2 percent and 2.5 percent, respectively.
“Boardman and Austintown aren’t municipalities, and they don’t collect income taxes,” Williams said. “We’re their water provider.”
If a JEDZ is established, Youngstown could offer economic incentives to businesses that the two other cities don’t, Williams said.
That includes the ability to borrow up to $2 million per project with no interest from the city, and up to 40 percent of a project’s financing on a long-term basis at 3 percent interest up to $1 million.
The study would be done by The PRM Group of Cleveland, the company that conducted the JEDD study for $100,000.
Rough estimates from Youngstown call for 550 acres of the MRCO to be developed, creating 2,750 jobs that would generate $2,233,000 annually in income tax starting in the sixth year of the JEDZ.
That same estimate has 43 percent of the new development in Campbell, 37 percent in Youngstown and 20 percent in Struthers.
Meanwhile, officials from communities in Mahoning and Trumbull counties along the Mahoning River met Friday.
The purpose of the Mahoning River Corridor Mayors’ Association would be to work as a regional group to seek state money for projects along the river.
The organization wants to seek a Local Government Services and Regional Collaboration grant from the state of up to $80,000. The grant would be used for a feasibility study of proposed projects along the river.
“This [group] is going to help us make decisions to help the region as a whole,” said state Rep. Robert F. Hagan of Youngstown, D-60th, who spoke at the meeting. “Other areas get state money we should have because of their regional approach.”
skolnick@vindy.com