Explanation
BACKGROUND: By authority of ORC Section 5709.82, the City is required to pay affected school districts 50 percent (50%) of the municipal income tax revenue attributable to tax abated projects where the annual ‘new employee’ payroll for a project is one million dollars for an Enterprise zone (EZ) or for a Community Reinvestment Areas (CRA) two million dollars or more, in a given tax year, during the abatement. This municipal income tax revenue sharing with affected school districts applies to all property tax abatements approved by the legislative authority after July 1, 1994 and is based on the ‘new employee’ wages paid in a tax year, during the years of tax exemption, and also on the wages of the construction workers.
FISCAL IMPACT: For tax year 2024, the City of Columbus has a total of fifty-two (52) agreements requiring revenue sharing and the total amount of revenue to be shared is $4,966,844.77. The fifty-two (52) agreements are related to projects located in seven (7) different school districts with the revenue share subtotals as follows: $3,462,839.30 to the Columbus City School District for Thirty-four (34) agreements, $93,757.06 to the Gahanna Jefferson City School District for three (3) agreements, $950,239.79 to the Hilliard City School District for seven (7) agreements, $41,292.71 to the Hamilton Local School District for one (1) agreements $224,418.51 to the Olentangy Local School District for one (1) agreements, $149,432.86 to the South-Western City School District for three (3) agreements and $44,864.54 to the Worthington City School District for two (2) agreements, and one (1) agreement split 56% / 44% between Columbus City School District & South Western City School District.
Emergency action is requested in order to expedite payment to the seven (7) school districts to compensate them for property tax revenues foregone due to tax abatements.
FISCAL IMPACT: The 2024 General Fund budget (citywide account) includes funding for these payments. An amount equal to 25 percent (25%) of the payments will be expended from the Income Tax Set Aside Subfund.
Title
To authorize the City Auditor to appropriate funds within the General Fund Income Tax Set Aside Subfund; to authorize the City Auditor to transfer $3,725,133.58 within the General Fund; to authorize the payment of $3,462,839.30 to the Columbus City School District, $93,757.06 to the Gahanna Jefferson City School District, $950,239.79 to the Columbus Hilliard City School District, $41,292.71 to the Hamilton Local School District, $224,418.51 to the Olentangy Local School District, $149,432.86 to the South-Western City School District and $44,864.54 to the Worthington City School District for income tax revenue sharing totaling $4,966,844.77; to authorize the expenditure of $4,966,844.77 from the General Fund; and to declare an emergency. ($4,966,844.77).
Body
WHEREAS, the Ohio Revised Code Section 5709.82 requires the City to pay affected school districts fifty percent (50%) of municipal income tax revenue attributable to tax abated projects where ‘new employee’ payroll for a project is one million dollars or more in a tax year, during the years of the tax abatement.
WHEREAS, the City of Columbus is subject to the income tax revenue sharing provisions of Ohio Revised Code 5709.82; and
WHEREAS, the City of Columbus has a total of fifty-two (52) tax abated projects subject to the income tax revenue sharing provisions and these projects are located in seven (7) school districts as follows: Thirty-four (34) projects in the Columbus City School District, one (1) project in the Columbus City School District & South Western City School District, three (3) projects in the Gahanna Jefferson City School District, seven (7) projects in the Hilliard City School District, one (1) to the Hamilton Local School District, one (1) project in the Olentangy School District, three (3) projects in the South-Western City School District and two (2) projects in the Worthington City School District; one (1) split 56% / 44% between Columbus City School District & South Western City School District.
WHEREAS, it is necessary at this time to authorize payment $3,462,839.30 to the Columbus City School District, $93,757.06 to the Gahanna Jefferson City School District, $950,239.79 to the Hilliard City School District, $41,292.71 to the Hamilton Local School District, $224,418.51 to the Olentangy Local School District, $149,432.86 to the South-Western City School District and $44,864.54 to the Worthington City School District for income tax revenue sharing totaling $4,966,844.77; to authorize the expenditure of $4,966,844.77; and
WHEREAS, the matter herein constitutes an emergency in that it is immediately necessary to authorize payment to the Columbus City School District, the Hilliard City School District, the Olentangy Local School District, the South-Western City School District and the Worthington City School District to compensate said school districts for foregone revenues due to tax abatements, for the immediate preservation of the public health, peace, prosperity, and safety; NOW, THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
Section 1. That from the unappropriated monies and from all monies estimated to come into said fund from any and all sources and unappropriated for any other purpose during the fiscal year ended December 31, 2024, the sum of $1,241,711.19 is appropriated in Fund 1000 (General Fund), Dept-Div 44-02 (Economic Development) in Object Class 05 (Other) per the accounting codes in the attachment to this ordinance.
Section 2. That the transfer of $3,725,133.58 in appropriation or so much thereof as may be needed, is hereby authorized within Fund 1000 (General Fund), from Dept-Div 45-01 (Administration), object class 10 (citywide account) to Dept-Div 44-02 (Economic Development), object class 05 (Other) per the account codes in the attachment to this ordinance.
Section 3. That the expenditure of $3,725,133.58 or so much thereof as may be needed, is hereby authorized in Fund 1000 (General Fund), Dept-Div 44-02 (Economic Development), in object class 05 (Other) per the accounting codes in the attachment to this ordinance.
Section 4. That the expenditure of $1,241,711.19 or so much thereof as may be needed, is hereby authorized in Fund 1000 (General Fund), Subfund 100099 (Income Tax Set Aside), Dept-Div 44-02 (Economic Development), in object class 05 (Other) per the accounting codes in the attachment to this ordinance.
Section 5. That payments of the following amounts to the following school districts are hereby authorized: $3,462,839.30 to the Columbus City School District; $93,757.06 to the Gahanna Jefferson City School District; $950,239.79 to the Hilliard City School District; $41,292.71 to the Hamilton Local School District; $224,418.51 to the Olentangy Local School District; $149,432.86 to the South-Western City School District; and $44,864.54 to the Worthington City School District.
Section 6. That funds are hereby deemed appropriated and expenditures and transfers authorized to carry out the purposes of this ordinance and the City Auditor shall establish such accounting codes as necessary.
Section 7. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, the ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes the same.