By Dustin Ensinger
A planned partnership between the city of Reynoldsburg and Etna Township has gone by the wayside amidst a change in state law and a court challenge.
Reynoldsburg City Council voted unanimously on June 30 to repeal a contract with Etna Township to form a Joint Economic Development Zone (JEDZ).
The city and township are facing a lawsuit filed last month by Ascena Retail Group – a business that would be impacted by the creation of the JEDZ – alleging the two governmental entities violated Ohio’s open meetings by meeting privately before approving the contract last month.
A bill signed by the governor last month would also make it more difficult to form such partnerships through the creation of a review council that would include representatives of businesses impacted by the special taxing zones. The new law also bans the creation of such taxing zones beginning in 2015.
Councilman Barth Cotner denied any wrongdoing on the part of city officials and said the change in state law led council to dissolve its partnership with the township.
“The issue really was that the rules had changed in this process,” Cotner said. “Given the new constraints put on these zones it wasn’t the agreement that Etna Township was looking for. It made the most sense to go ahead and stop that process.”
For the partnership to become official, Etna Township voters would have had to approve it in an Aug. 5 special election. The lawsuit asked the Licking County Common Pleas Court to remove the measure from the ballot.
The JEDZ would have covered nearly 1,500 acres near the intersection of Interstate 70 and State Route 310 in Etna Township. Workers in the JEDZ area would be assessed Reynoldsburg’s income tax rate of 1.5 percent.
Under Ohio law, townships cannot enact an income tax. However, by partnering with a municipality a township can create a JEDZ and assess an income tax in the specified area at the municipality’s rate. The money must then be used for infrastructure projects to promote economic development.
In this case, the township planned to make a major bridge improvement among other projects.
The JEDZ was expected to generate about $400,000 in revenue annually. The township would have kept 70 percent of the total. Reynoldsburg was set to receive 20 percent. The remaining 10 percent was to be used to pay the Regional Income Tax Agency and the board that oversees the JEDZ.
While the revenue Reynoldsburg would have received was not substantial, Cotner said said every little bit counts in the cash strapped city.
“We are hard pressed for dollars in this community,” he said. “That income could have benefited the city of Reynoldsburg.”