43
Mahoning County dollars flow to Regional Chamber
YOUNGSTOWN
Though Mahoning County was responsible for some $78,700 in revenue to the Youngstown-Warren Regional Chamber over five years, its auditor directly paid the chamber only $35,935 of that amount.
The county’s direct payments included fees for employee attendance at chamber-sponsored continuing-education seminars and for organizational memberships for the county’s board of developmental disabilities and emergency management agency.
The county paid for those departmental memberships even though the county has a free courtesy membership.
The other $42,765 of the total came directly to the chamber as administrative fees from businesses getting enterprise-zone tax abatements, which were facilitated by the chamber, said Tony Paglia, the chamber’s vice president for government affairs.
An enterprise zone is an economically troubled area eligible for tax abatements. Enterprise zones have been established in Youngstown, Campbell, Struthers, Lowellville, Coitsville, Austintown, Jackson Township and Sebring.
The chamber gets the money from the businesses under an economic-development agreement between the chamber and the county.
“We probably spend more money in labor to manage this program than we actually receive” in fees, Paglia said. “We’re doing this as a service to the county.”
Paglia said he could not be specific about the amount of financial shortfall.
State Rep. Robert Hagan, of Youngstown, D-60th, has called the chamber politically biased and asked county commissioners to stop funding the chamber for further economic development projects.
Hagan’s letter followed withdrawals of chamber membership and support by Atty. Dave Betras, county Democratic Party chairman, and Bruce Zoldan, chief executive officer of B.J. Alan Co., because Chamber President Tom Humphries’ co-hosted a fundraising event for John Kasich, Republican candidate for governor.
Hagan said he stands by his statement. “Our tax dollars pay the county commissioners to do economic development programs,” he said.
County employees can attend similar, free seminars offered by the Ohio Department of Development, he said.
“I don’t want one dime of our tax dollars going to the chamber, when it is clear that they have become the political arm of the Republican Party,” Hagan said.
Paglia said the local chamber does not endorse or contribute money to candidates. Any gifts by local chamber employees to candidates come from the employees’ own funds, he said.
The current one-year agreement between the chamber and the county, expiring at year’s end, is renewable for up to two one-year terms. It calls for the chamber to help companies seeking to invest in, or add or retain jobs by providing site, population and community information; access to and understanding of government programs that assist business; and pre-project planning and coordination assistance.
The chamber must serve as county enterprise-zone manager, and it monitors companies’ compliance with terms of tax abatements, such as the amount of new investment and the number of jobs to be created by the projects, Paglia said.
One example of a tax abatement approved by county commissioners was last year’s 60 percent, 10-year real-estate tax abatement for McHenry Industries, in connection with its move from a 19,000-square-foot Industrial Road plant in Youngstown to a new 41,000-square-foot plant on Victoria Road in Austintown.
That sign-making company had 52 employees, and said it planned to make a total investment of $4.2 million and add at least 15 employees within three years after opening the new plant. In exchange, Austintown and its schools will forgo about $456,000 in tax revenue over the life of the abatement.
Companies getting tax abatements typically pay a $500 to $700 administrative fee annually to the chamber over the life of the abatement, Paglia said. With a $500 minimum, the fee is based on the amount of the abatement.
“They’re getting $95,000 in tax breaks and paying $5,000 to the chamber,” Hagan said, using figures for a hypothetical company and calling the arrangement “obnoxious.”
“I’m not really interested in defunding them right now. I think the chamber does a great job for us,” said Commissioner John A. McNally IV. “I don’t think that particular issue should get caught up in, quite frankly, politics.”
McNally added: “We could not pay somebody to do that work for that amount of money.”
The county does not have anyone on its staff who could assume the economic-development functions, McNally said.
The new $64 million Patriot Special Metals plant in North Jackson, the $650 million V & M Star expansion in Youngstown and the $350 million retooling for the launch of the Cruze at General Motors in Lordstown are all examples of major projects, in which the chamber has provided economic-development assistance, McNally said.
For its efforts to attract Patriot, the chamber received the top business attraction award last year from Team NEO and Inside Business magazine. The GM effort made the chamber a finalist in the business retention category.
“I would be more than happy to facilitate a meeting between ... Hagan and the local chamber and bring them down here to the commissioners’ office, which, of course, would allow us all to have the ability to understand both sides of the issue,” said Anthony T. Traficanti, commissioners board chairman.
As for the duplication in county memberships, Larry Duck, superintendent of the county’s board of developmental disabilities, said: “The question never came up.”
The developmental disabilities board benefits from the convenience of having chamber materials come directly to the Austintown-based board, which has been a chamber member for eight or nine years, he said. The board pays $2,100 a year for its membership, which Duck said provides access to a membership directory, linking it to businesses that can provide contract work for the board’s clients.
Chamber membership also gives the board access to technical advice on personnel, financial, marketing or building maintenance issues, he added. The chamber’s regional wage and benefit survey serves as a reference point in evaluating wage and benefit levels.
“It’s really an informational relationship,” said Clark Jones, county EMA director, referring to the $185 a year his organization pays annually from a state grant for its chamber membership.
Jones said his agency has been a chamber member longer than the 11 years he has worked at EMA and that he was not aware of the county’s courtesy membership in the chamber.
The only other Mahoning County agency with a chamber membership is the Alcohol and Drug Addiction Services Board, according to chamber records.
Annual chamber membership dues start at $125 for individuals, $185 for non-profit organizations, and $295 for businesses and increase based on the number of employees.
Ideally, McNally said the county would have just one chamber membership at a reasonable rate, encompassing all county agencies and departments.