April 24, 2014

Mostly clear

Lorain Council’s plan cuts school money

LORAIN — Lorain Schools could receive less in new taxes from commercial properties under a plan being considered by City Council to pay for infrastructure improvements in blighted areas.

School Treasurer Dale Weber said the district, which has a $90 million annual budget, receives about $20 million in annual property tax revenue. Weber said negotiations between the city and school board are in “very preliminary stages,” and it is too early to say how much money the district could lose if the plan is adopted.

Ohio law allows communities to designate “blighted areas” for infrastructure upgrades such as road improvements or installation of sewer lines. The goal is to attract more businesses to these areas while not having to tap into general funds to pay for improvements.

Safety/Service Director Robert Fowler said the proposal, involving one property on Grove Avenue, two on Oberlin Avenue and one on Meister Road, would involve only about $6,000 less for Lorain Schools annually and $2,000 less for Clearview Schools.

“It’s peanuts,” Fowler said.

The law, which requires negotiations if extended over 10 years, allows cities to collect 75 percent of new property tax revenue for 10 years. Fowler said the proposal calls for the city and school districts to split revenue 50/50 for 20 years. School districts would receive the full amount of revenue after 20 years.

Fowler said Lorain Schools will receive more money by extending the agreement, and said the city is not trying to hurt Lorain Schools or Clearview Schools. Fowler said the city is trying to maximize general-fund revenue rather than having to reduce services or resort to layoffs to pay for improvements.

“This is a way we can both benefit and come to something that is truly a benefit for not just the city and schools but the whole community because now projects get done,” he said.

Hit hard by a shrinking local tax base and less state taxpayer money over the last decade, Lorain Schools were about to go broke before a levy passed in 2012. Lorain board members Tony Dimacchia and Bill Sturgill said they haven’t taken a position on the proposal, but board member Jim Smith said he’s against it. Board President Tim Williams didn’t return calls Monday.

Smith said such a move could make it harder for the district to pass levies.

“It’s a money grab, but it’s legal,” he said. “It’s a pretty unfair way to raise money because it would basically take money out of the pockets of the school kids.”

Board member Mitch Fallis, a former Council member, said the proposal would set a bad precedent and the district may face hard financial times in the future. “It would be unconscionable for me to support something like this at this time,” he said.

Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com.

  • stillsleepyeyes

    pass that levy and everyone wants there cut………….didn’t take long to figure how to get it………………even if it wasn’t directly……………..

  • SoLoJimbo

    Will Family Dollar not locate to Lorain without this? Will Taco bell not locate without this? Will the Credit Union, which is already under construction, stop without this? Come on Lorain!!! Is Sandy on work release for Lorain???? I think Lorain Schools lost a generation before now, according to these rediculous scams these guys are trying to pull. Just say no, they will come anyways. You’re not attracting anything of value here. Don’t fall into this trap. If they fail, the taxpayers have to pay the bonds whether the business pays tax or not. It’s a terrible shell game.

  • SoLoJimbo

    Lorain School Board, cut a deal with Lorain City to pay you $6,000 per year to make up for your loss. According to Fowler it’s only PEANUTS!

  • oldruss

    Not unlike the boondoggle created by the 100% tax exemptions granted to homeowners in some of the most expensive homes in Lorain through the Community Reinvestment Area tax abatements. The schools get cheated out of needed tax revenues, and the homeowners, in exchange for tax exempt status pay the city instead of the schools getting the tax revenue. A Lorain City Councilman, who himself benefitted from the tax abatement, and whose employer also benefitted, was at the forefront of ramrodding this little bit of thievery through city council.