How Columbus Funds Boost Local Economic Growth

Columbus Invests Millions in School Districts to Support Economic Growth

Columbus, Ohio is making a significant financial commitment to surrounding school districts, allocating nearly $6 million as part of agreements tied to economic development and job creation. This initiative is part of a broader strategy aimed at attracting businesses to the city and fostering long-term growth.

The city has established a program that offers tax incentives to qualifying companies looking to build or expand in Columbus. These tax breaks are designed to encourage businesses to invest in the area, with the ultimate goal of creating jobs and boosting the local economy. While these companies still pay property taxes, they only pay a portion of the tax on property improvements. Traditionally, this money would go to school districts, but instead, the city compensates these districts from its general fund.

According to the legislation, “Per Ohio law, the city is required to pay affected school districts 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 Area (CRA) two million dollars or more, in a given tax year, during the abatement.”

Columbus City Councilmember Nick Bankston emphasized the importance of this initiative, stating, “It is about bolstering jobs, but it’s also about that long-term investment and how we’ll intentionally make a change in our school districts and our communities as a whole.”

Expanding the Program with Multiple School Districts

The city has entered into 55 agreements with seven school districts, including Columbus City Schools, Gahanna-Jefferson, Hilliard, and Olentangy. These partnerships are essential in ensuring that the benefits of economic growth are shared across the region.

One example of the program's success is Rouge Fitness, a company that was able to establish itself on a previously unused brownfield site. Bankston highlighted the positive impact of such agreements, noting that they help revitalize underutilized areas and bring valuable resources to the community.

Ensuring Accountability and Compliance

To maintain the integrity of the program, Columbus meets with businesses receiving these incentives each year. The goal is to ensure that these companies meet their commitments, providing a return on the city's investment and benefiting both residents and the local economy.

Bankston also mentioned additional requirements for businesses seeking incentives. For instance, companies must offer a minimum wage of $20 per hour, provide health care benefits, and include some form of retirement plan. These standards are meant to ensure that the jobs created through the program are high-quality and sustainable.

Criticisms and Concerns

Despite the program's successes, not everyone is convinced of its benefits. During a recent council meeting, a speaker expressed concerns about the allocation of funds, arguing that the money could be better used elsewhere. They pointed out that school districts are losing out financially due to the tax abatements and criticized the incentives as "ridiculous," especially amid rising property taxes.

However, the Director of Development for Columbus defended the program, stating that the tax incentives are a key factor in attracting businesses to the city. Without these incentives, the community could miss out on potential economic opportunities and the jobs they bring.

Conclusion

As Columbus continues to grow and evolve, the city's approach to economic development remains a focal point. By investing in school districts and offering tax incentives to businesses, Columbus aims to create a thriving environment that benefits both the local economy and the community at large. While challenges and criticisms exist, the city remains committed to its vision of long-term growth and development.