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.