Study says tax abatement encouraged sprawl -- especially in Cleveland; leaving big city residents and those in the inner suburbs with fewer job options
People who work in Cleveland inner ring suburbs have the option of taking public transportation to work, like the Healthline that runs along Euclid Avenue in Cleveland. Eighty percent of companies that got tax abatemets relocated to locations away from public transportation, a study by the nonprofit Good Jobs First released Thursdays Ohio's tax abatement programs, designed to keep businesses in the state, have failed Cleveland residents and those in the inner-ring suburbs by moving jobs away from the urban core to more affluent areas, said a report released Thursday.
"Paid to Sprawl: Subsidized Job Flight from Cleveland and Cincinnati" found that 164 companies were given lucrative property tax breaks as they relocated facilities around within both metro areas.
The study by Washington, D.C.-based Good Jobs First, a nonprofit research center, said jobs were moved from areas that were more racially diverse, had higher concentrations of poverty and more plant closing to areas that were more affluent and often in the far reaches of the county.
The subsidized relocations affected 14,500 workers "and by many measures fueled suburban sprawl, especially in the Cleveland region," the report said.
Greg LeRoy, one of the study's authors and executive director of Good Jobs First, said 80 percent of the moves were to locations that had no access to public transportation. The group looked at 152 tax abatements that totaled about $29.7 million. Each abatement averaged $317,000 for each Cleveland facility and $223,00 per facility in Cincinnati. The relocations occurred between 1996 and 2005, but the group said most of these trends still continue.
To remedy some of the problems, Good Jobs First recommends:
•Governmental bodies adopt anti-poaching policies designed to discourage companies, municipalities or counties from competing with each other
• Revenue-sharing packages that include provisions that companies must move near public transportation
• A public records requirement that the costs and benefits of all economic deals be available online
Ken Montlack of the First Suburbs Consortium, who attended a press conference at Trinity Commons Thursday in which LeRoy unveiled the report, said little was new in the report, but the information was still valuable because it highlighted a longstanding problem.
He said he was going to lobby his group to recommend that a no-poaching agreement be a mandatory requirement of tapping a newly created $100 million economic development fund in Cuyahoga County.
"Let's put some muscle in it," Montlack said.
Zach Schiller, research director for the nonprofit research group Policy Matters Ohio, said "Ohio's local tax abatement policies are likely to be re-examined and perhaps overhauled soon as a part of the shift to a privatized state economic development effort.
"We need to be sure if these programs are updated or consolidated that we retain the transparency we have now," Schiller said in an email. "We need to know if tax abatement is subsidizing business relocations, as we do now under the state's enterprise zone program. Ohioans will need to watch carefully and ensure that our access to this information is maintained."