Are the losses from commercial tax exemptions worth the economic growth?

For almost a decade Ohio has been an area offering tax exemptions to commercial businesses on their plans for new construction. 

Each business negotiates their tax exemption with local leaders bringing in their industry and helping the local economy. But when you add up the numbers, significant amounts are not handed over that could've gone to schools, infrastructure and public services.

In Trumbull County, the most recent tax year shows $1,078,149.56 was forgiven in the exemptions, Columbiana reported $718, 203.58 in exemptions and a Mahoning County Enterprise Zone report that does not include the city of Youngstown's exemptions states $24,850.49 was forgone. 

Even with the forgiven taxes, revenue is still brought in. Each county collects a different percentage of some tax from the company adding up to hundreds of thousands of dollars. 

“They're still increasing revenue, they're still increasing the tax base,” Nic Coggins, the assistant director of the Trumbull County Planning Commission said. “If we didn't have those incentives we probably wouldn't get those projects so we have zero or we get 40 percent.”

But as more companies catch a break, counties still need to collect from somewhere.

“When some gets an abatement or someone gets an exemption taxes some else has to pay more and who usually pays more, the residential home owners,” Ralph Meacham, the Mahoning County Auditor said. 

But getting rid of the exemptions to even the scales back as some suggest to get rid of personal property taxes may be an unreliable option. 

“There are certain things attached to property…you’re going to want fire, you want police, you want roads, you want township government and those are all things that are probably the most appropriately taxed based on the property, the real estate,” Meacham said. 

Some officials who negotiate with the industries say doing away with the exemptions would hurt the taxpayer in the end because the corporation's main focus is their own bottom line.

“Companies will come in and say ‘if this isn’t part of a deal our numbers don't work at your site we’re going to go to Pennsylvania or Geauga County or West Virginia,’” Coggins said. 

Making these exemptions one of the most lucrative ways to keep Ohio competitive with neighboring states in the fight for economic growth.