Canal Winchester won’t join job-poaching pact

ThisWeek CW 04/05/2012

http://www.thisweeknews.com/content/stories/canalwinchester/news/2012/04/03/city-says-no-to-joining-job-poaching-pact.html

Canal Winchester will not participate in an agreement aimed at reducing job poaching among central Ohio communities.

Columbus Mayor Michael Coleman announced a deal on March 21 that forbids tax-incentive agreements for companies that move from one central Ohio city to another. It also put an 18-month moratorium on such agreements for the communities that signed the pact.

“You may have read recently about communities around Interstate 270 and Columbus signing a contract to all be friends over jobs. However, we opted not to participate because we feel there is an unconstitutionality to sharing income tax this way,” Mayor Michael Ebert told Canal Winchester City Council on April 2.

At a press conference on March 21, Coleman said Columbus, Bexley, Gahanna, Grandview Heights, Grove City, Groveport, Hilliard, New Albany, Obetz, Reynoldsburg, Upper Arlington and Worthington had agreed to the moratorium on job poaching.

According to Coleman, Dublin and Westerville were still in negotiations, but Canal Winchester and Whitehall would not participate.

Westerville has since opted out of the agreement. Westerville City Manager Dave Collinsworth said the original plan would have allowed some flexibility for companies; it said if a company needed to find a new facility to accommodate growth, a different community could offer an incentive.

If a company payroll were more than $10 million, the municipality it moved to would share some of the tax revenue with the community the company was leaving, Collinsworth said.

Westerville backed out when the complete moratorium on tax incentives for companies from other central Ohio communities was put on the table, Collinsworth said, because that deal is too restrictive.

Canal Winchester Finance Director Nanisa Osborn said the income-tax sharing as it is currently being described to city officials wasn’t something they could agree to.

“If someone moves their company from one community to another with a payroll of $10-million or more, you will have to pay the community they left 50 percent of that community’s income tax rate,” Osborn said. “So in our case, if a business leaves Columbus that has a 2.5-percent rate and comes to Canal Winchester with a 2-percent rate, we would owe the difference; and if there’s an incentive such as at Canal Pointe, this overage just keeps snowballing.”

Ebert agreed.

“It was clear we didn’t have any say in the agreement,” he said. “Nanisa and I went to the first meeting, and we both came out of it with the same feeling, that (Canal Winchester) was an afterthought.”

Another concern was in dealing with company relocations that do not include any incentives.

“One of the other points is that we have a business (HFI) that left another community for ours. They didn’t come and talk to us until the day they finished the deal,” Osborn said. “We didn’t poach them, they moved themselves, so should we owe for that or what? We didn’t incentivize them but they moved into a location that is. There are a lot of questions left to be answered.”

Participating cities are expected to pass legislation supporting the moratorium by the end of May.

“For the time being, we’re not on board, but we could opt in later on,” Ebert said. “So far, no city councils have approved this yet. We’ll wait and see if they come up with answers to our questions first, and then we’ll decide if we want to join at that time.”

The next scheduled city council meeting will start at 7 p.m. Monday, April 16, at Town Hall, 10 N. High St.