Officials analyze Delphi tax effect

Depreciation of facilities to impact property owners

By Ed Runyan

runyan@vindy.com

WARREN

Trumbull County taxpayers will be impacted by the dropping value of former Delphi Packard Electric factory buildings along North River Road and Larchmont Avenue.

The Western Reserve Port Authority would like to acquire three of the buildings and attempt to resell them to prevent further decline in value.

The biggest impact will be in the Lakeview and Howland school districts and in Bazetta and Howland townships. The tax loss to the school districts and the two townships, however, won’t be large enough to cause a great deal of trouble for them, officials say.

Adrian Biviano, Trumbull County auditor, said that under the state’s property-tax laws, any reduction in the amount of property taxes paid by Delphi Corp. on its North River Road facilities will be made up mostly by property owners in Bazetta and Howland townships and the city of Cortland.

Bazetta Township and Cortland residents pay taxes to support the Lakeview school system. Some of the vacant Delphi buildings are in Bazetta Township, which affects Lakeview funding. Some are in Howland Township.

The state’s funding formula equalizes most taxes, meaning that for every drop in the taxes paid by one property owner, such as Delphi, there has to be a corresponding increase in the taxes for the others in the taxing district.

In that way, all voted tax levies raise the same amount of revenue for a school district or other entity each year, regardless of increases or decreases in property values, Biviano said.

As for the Delphi buildings, reductions in the value of its buildings will start to impact property owners in 2012, regardless of whether Delphi Corp. razes or sells some of its factory space, Biviano said.

The reason is that the taxes on five of the seven buildings will drop after the county’s current revaluation is complete effective Jan. 1, 2011.

The new valuation in 2011 will affect the taxes paid in 2012.

“They’re vacant, so the value is dropping,” Biviano said of the five Delphi buildings.

Delphi continues to use the two buildings closest to North River Road but would like to raze two buildings in the middle. It is negotiating with Trumbull County commissioners and the Western Reserve Port Authority to sell the three buildings closest to the state Route 5 Bypass.

The port authority runs the Youngstown-Warren Regional Airport and has economic-development ventures in the Mahoning Valley.

Trumbull County Commissioner Paul Heltzel said negotiations with Delphi continue. If successful, the port authority would acquire the three buildings — about 1.2 million square feet of production space — and attempt to resell them to another manufacturer.

The intent of county officials is to protect the buildings from demolition, since demolition would further reduce the value of the Delphi land and make it harder for a company to bring jobs to the county, Biviano said.

“They’re in a good location, and they’re in good shape,” Biviano said of the facilities, which have ready access to the Route 5 Bypass.

As for the direct impact on schools, townships and other government entities, Biviano and Milt Williams, Lakeview treasurer, say it will be minimal.

Most of the production space the county hopes to acquire is in Bazetta Township. The biggest beneficiary of the property-tax dollars there is the Lakeview school district, which receives about half of all property taxes paid there.

The only portion of those taxes that Lakeview schools would lose in the event that the taxes were no longer paid is the small portion called “inside millage,” Biviano said. Inside millage is millage that was approved decades ago by the Ohio General Assembly, not by voters, Biviano said.

Even though Lakeview gets the largest amount of the property taxes, the school district believes it would lose only around $3,000 per year if all of most or all of those property taxes were eliminated — because other taxpayers would even out most of the loss, Williams said.

Sam Lamancusa, Trumbull County treasurer, said the loss of Delphi taxes will be spread out over a large number of property owners, so most people won’t notice the increase in their taxes.