Abatements cost Ohio schools $125.6M

Staff report

Property tax abatements caused 180 school districts across Ohio to forgo $125.6 million in revenue, according to district financial reports issued for the 2017 fiscal year.

For the first time, under a new national accounting standard, school districts in Ohio and across the country had to report how much revenue they forgo to tax abatement. Policy Matters Ohio, assisted by the national nonprofit Good Jobs First, reviewed financial statements for 464 of the state’s 608 school districts to produce the numbers in a report released Tuesday.

Youngstown City Schools, which is No. 23 of the top 25 school districts with forgone revenue, gave up $976,774.

“With $43.8 million, or a little more than a third of the losses reported, Ohio schools could refill the positions of 662 librarians eliminated between the 2005-06 school year and 2016-17,” said Zach Schiller, Policy Matters research director and lead author of the report. “That shows that while the forgone revenue from tax abatement is relatively small compared to total K-12 spending, it’s still quite meaningful.”

Tax-abatement revenue losses were concentrated in major school districts such as Cleveland, which reported more than $34.2 million in forgone revenue, and Cincinnati, which reported almost $18.4 million. School districts in the state’s eight largest metropolitan areas accounted for nearly $120 million, or the overwhelming majority of the total.

The total of $125.6 million reported in forgone revenue does not include significant abatements that are not required to be reported under the new accounting standard. Most losses from tax increment financing, which accounts for more than half of property tax abatement in the state, don’t have to be included.