West Chester tax adjustments cost Lakota $3.6 million

Lakota Local Schools would have started collecting about $5 million more annually in the next few years, but that was before West Chester Twp. trustees agreed to extend a portion of a taxing district an extra 15 years.

Trustees on Tuesday agreed to initiate the process to extend of a portion of the Union Centre Boulevard tax increment financing district, called a TIF, and dissolve another portion four years early.

“We do appreciate the opportunity to collect on a portion of the TIF a little earlier than expected,” said Jenni Logan, treasurer for Lakota Local Schools.

Lakota will start collecting an additional $1.4 million beginning in 2018 under the TIF change, however, Trustee George Lang said the school district would have started collecting an additional $3.6 million annually if the trustees don’t extend part of the TIF.

“I don’t want to be deceptive, that this is all sugar and spice for the school districts because had these TIFs expired in 2021, that would have been about $5 million approximately going to the school district …,” he said. “Long term it is a sacrifice for the school districts but even longer term it’s going to be a tremendous boon for the school districts, because the money is going to be used for more infrastructure and we’re going to attract more jobs.”

Logan said the change definitely will have an detrimental impact on the budget for Southwest Ohio’s second largest school system.

“It’s the loss of the full value over the 15-year span that could have a devastating impact on the district’s long-term financial sustainability,” Logan said.

Trustee Lee Wong said in the long run the schools will reap the benefit because the township will be able to use the money to “spur” development in the area, which is good for everybody.

“This is good for the community, for business development, to spur development in the area and also for the schools in the long run,” he said. “Without TIF there wouldn’t be any development like we have right now at Union Centre. The tax valuation is over $1 billion that brings in steady tax revenue for the schools.”

TIF districts are an economic development tool that many local governments use to encourage new investment in an area. A district typically surrounds a parcel or group of parcels and enables the taxpayers within it to make payments into a special fund in an amount equal to their property tax liability for the life of the TIF. These payments in lieu of taxes are used by the local governments to retire debt incurred for the infrastructure improvements — such as roads and water and sewer lines — needed to support current and future development in the area of the TIF.

The schools receive property taxes from this district on the original value of the property. The TIF collects only payments on the increased value of the property as a result of improvements to the properties.

Township Administrator Judi Boyko said in 1994 the state legislature made provisions that taxing bodies could negotiate payments to schools that weren’t previously available under the law. The Union Centre Boulevard TIF was created in 1990 before the legislative change, so Lakota had been out that money.

That’s why in 2004, West Chester Twp. carved out approximately 200 acres of the existing Union Centre Boulevard TIF and created an overlay TIF so Lakota could receiving funding on a portion of the TIF.

“It’s important for our community to understand that every source of funding prolongs our financial capacity to continue providing quality learning opportunities to our students without having to put that burden on local taxpayers,” Logan said.

Boyko said she understands why the move might not please officials and taxpayers in the Lakota school district.

“West Chester appreciates, on its face, this proposal postpones the full financial benefit to Lakota,” she said. “To assist, the township will endeavor to develop public-public partnerships.”

But the extension is necessary to ensure the Union Centre Boulevard area remains viable and thriving, she said.

“Extending the TIF in order to protect the initial investment at Union Centre and to invest in other infrastructure needs with the interest of preserving, even increasing, property values will sustain the schools and the entire community,” Boyko said.

The township has eight TIF districts that allowed them to fund about $32.4 million in road improvements and reaped more than $3.4 billion in new investment, more than 32 million square feet in new construction and more than 36,000 new jobs. TIF funds have also built a new library, developed parks and supplemented police and fire services to the community.

Staff Writer Michael D. Clark contributed to this report.

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