Hoping to generate a mutually beneficial revenue source, Garrettsville is shopping the idea of a Joint Economic Development District to its neighboring townships.
The idea, said village Council Member John E. Brachna, is to attract new businesses and to encourage existing businesses to upgrade or expand. That takes money, which would be provided by an earned income tax the JEDD would impose on people employed within its borders.
JEDD 101
Ohio law allows municipalities and townships to create JEDDs with aims of “facilitating economic development to create or preserve jobs and employment opportunities and to improve the economic welfare of the people in the state and in the area of the contracting parties.”
Once a JEDD contract is signed, the municipality can’t annex township land within the JEDD borders for three years and may extend that prohibition beyond three years.
JEDD contracts must specify the JEDD borders and outline what services the municipality and township must provide. Residents of the township and municipality must approve the JEDD at the ballot box.
The JEDD’s board of directors can propose an income tax “for the purposes of the district” and to fund the municipality’s and township’s services to the JEDD. Voters living in the JEDD would also have to approve the income tax (unless no one lives in the JEDD).
Incorporated areas (villages and cities) like JEDDs because they provide another revenue source, Brachna explained. Townships, which do not collect income tax revenue, get a brand-new source of income. What the split would be remains under discussion, but typical agreements are 50-50 or 60-40, he said.
“It generates new income tax to the city or village, and then with that, that city or village is increasing services to the JEDD area. There’s new police patrols, water, sewer, a new road, repair an existing road … something that benefits companies in the JEDD area, that allows them to potentially expand more, add more jobs, build an addition, gives them more tools to grow their business,” he said.
The JEDD income tax would only be felt by people who both live and work in the township, he said. Garrettsville would likely also receive an administration fee for handling the JEDD’s finances, he said. That’s because the village already has the infrastructure set up for processing income tax. Townships don’t.
Nelson weighs in
Nelson Township Trustee Anna Mae VanDerHoeven told The Portager the township may not be the right place for a JEDD.
“If we have a large parcel and a business that wanted to come here, we do not have infrastructure. We don't have natural gas. We don't have water. We don't have sewer. I mean, a business that would come to Nelson would have to invest a lot of money into infrastructure to even think about coming to Nelson,” she said.
The only likely locations for a JEDD are on state Route 88, where Nelson’s two largest employers, Hermann’s Pickles and Bonner Farms Beef & Market, are located, VanDerHoeven said.
“I have not talked to the owners of the business or what benefit we would receive by going with the JEDD: how many employees they have, if they have to pay an income tax on their wages, if they would be in favor of that,” she said. “But, you know, people are taxed to death right now, and I don't know if it would be a good idea for Nelson.”
VanDerHoeven said she doesn’t see any reason to continue discussions about forming a JEDD in Nelson Township.
“I have nothing against JEDDs. I just think they have to be in the right spot at the right time,” she said.
A Garrettsville-Freedom JEDD?
Jeff Derthick, a Freedom Township trustee, said he’d met with Brachna and is open to learning more about JEDDs. Likely candidates would be Freedom’s centrally located residential-commercial and light-industrial districts, he said.
“With the state of ‘Ax the Property Tax’ and the fact that the state government is squeezing the townships, you got to do some education. You have to be looking around at other things, and you have to keep an open mind,” he said.
Should the proposal to abolish property taxes statewide move forward, a Garrettsville-Freedom JEDD could provide an alternative income source for the township, allowing it to provide needed services, Derthick said.
Is a JEDD right for Freedom? They may help townships expand water, sewer, roads and other infrastructure, but Derthick said Freedom doesn't currently have such needs.
“We don’t have a business that is looking to build in Freedom Township, either, and that would be the other driving force to it,” he said.
Two other townships — Hiram and Windham — surround Garrettsville.
Hiram Township Trustee Jack Groselle and Windham Township Trustee Dan Burns said they had not been approached about a JEDD. They could not say where one might be sited in their townships and offered no opinions without considerable education.
Wendy DiAlesandro
Wendy DiAlesandro is a former Record Publishing Co. reporter and contributing writer for The Portager.