- JEDD Income Tax
- JEDD I Background
JEDD I Background
The following background information was presented at the Board of Trustees Special Meeting on January 24, 2006.
What Is a JEDD?
- A means for township, which is very limited in its ability to acquire revenue, to work cooperatively with a municipality to incorporate an earnings and enterprise tax in a specific area of the township.
- Earnings tax can only be assessed on those who work in the proposed JEDD area. Earnings tax cannot be assessed on residents of the township, except for those who are employed in the proposed JEDD area.
- Enterprise tax is prorated in relation to the net profits generated within the proposed JEDD area.
Why a JEDD?
- The JEDD will provide a source of funding for making the infrastructure improvements to promote and sustain commercial development - economic engine.
- Local Governments are expected to fund much more of a greater share of projects - federal government broke, state is broke, locals must depend on themselves.
- State of Ohio - elimination of inventory tax on business reduces the available funds from property tax for infrastructure - townships depends on property tax revenues for infrastructure; however not all entities pay property taxes - with its decreases due to state legislation and exemption of certain entities, other avenues have to be looked at such as TIFS, RIDS and JEDDS.
- Dependence on one source of revenue (property tax) is not looked favorably on by bond rating companies - diversification of revenues sources is a good practice and enhances the township’s financial standing which allows for lower interest rates and underwriting costs.
- Additional revenue will allow for the JEDD territory to provide enhancements such as landscaped boulevard streets, street lighting, street trees, attractive signage and entrance treatments, township identification, and image.
- The JEDD revenue will allow the township to assist in site location for new business development and expansion of existing businesses.
- In the future, the JEDD revenue will provide funding to maintain the infrastructure and provide emergency services to the new development while reducing the burden on the general fund to provide these services - will become self-sufficient.
- Commercial development will increase our general fund revenue through property tax increases of commercially developed property. (Property values in Fairfield Township have increased since JEDD.)
- Regional cooperation in furtherance of economic development which is not expected to stop at the township or county lines.
- Objective is expanded flow of commerce along vastly improved transportation links.
Specifics of the Liberty Township JEDD I
- Partnering with the Cities of Middletown and Mason.
- The JEDD contract calls for the levy of a 1.5% income tax on individual earnings as well as business net profits derived from businesses and employees within the JEDD.
- The City of Middletown will provide the tax collection. The JEDD contract calls for the City of Mason to provide for the improvement and construction to such roads that provide an improved transportation network to and from the JEDD area - this helps with transportation flow with the region as a whole.
- City income tax and JEDD tax follow the same rules with respect to reciprocity. If a city (where the employee lives) allows credit for other city tax paid, they must allow credit for JEDD tax paid. This is required by Ohio Revised Code 718.16.
- The contract is a voluntary JEDD which requires support from 51% of the property and 51% of the business owners in the JEDD area - which number approximately 200 combined.
- Approximately 685 acres included in the JEDD area which is currently zoned for General Business Districts and Office Districts.
- 40 year agreement with entities coming together to decide if they want to extend another 10 years.
- JEDD Board includes a Liberty Township representative, Employee representative, Business owner representation and a Mason / Middletown representative. These 4 choose a chairperson.
- Anti-Annexation - agreement includes comprehensive anti-annexation covenants for the entirety of Liberty Township for the life of the JEDD.