By Brian Massie, A Watchman on the Wall
We thank Mr. Auston Hensley, a patriot and attorney from Beavercreek, Ohio, for his timely, important message about Ohio’s property taxes. His statement debunks the statement made by Mr. Bill Homan and his Homestead Heroes group that abolishing property taxes will incentivize Blackrock to buy up all the land in Ohio.
Ohio doesn’t have a problem generating revenue, it has a spending problem and the unholy alliance between the politicians and their donor base taking priority over the financial interests of the citizens of Ohio.
By Auston Hensley, Beavercreek, Ohio
Any time someone claims abolishing property taxes would allow institutional investors like BlackRock to buy up everything at will, point out that BlackRock is already paying zero. Abolishing property taxes will just level the playing field.
I started off with the thought of “I don’t think there’s a single commercial development made in the whole state in the last 20 years that didn’t involve some sort of tax abatement, TIF, or other sweetheart deal.” Because as a real estate investor, I cannot make any new construction pencil out whatsoever – and it all comes down to how much property tax I would pay after construction was complete. I just cannot collect enough rent to justify the costs and taxes, which is why I don’t do it.
Which led me to a number of numbers and articles. In Franklin County (Columbus), nearly 30% of all industrial and commercial property was abated via a TIF (tax increment financing) as of 2018. A TIF is when the city takes out a bond to build infrastructure immediately around a development, and then uses future property tax revenue to pay down the bond over time. That meant that fully one third of commercial and industrial properties in that county are not paying taxes to fund the schools – shifting the full burden to the remaining two-thirds. And that was 2018, I can guarantee it’s worse now.
The only new construction that’s going in, without a tax abatement, is residential – because that forces the future homeowners to pony up. The result is you wind up with tax bills and distributions like this chart:
But what was going on there?
In the late 2000s, Columbus attempted to revitalize the “Short North” neighborhood (between downtown and Ohio State’s campus) by bringing in new development. How they did that was a 15 year tax abatement on all rehabs in the area.
And that’s just houses. Keep in mind that almost all of the major deals ever announced – Intel in Columbus, data centers statewide, etc – under the hood, these only ever happen because the city, or county, hands out a partial or total tax abatement.
Franklin County alone has 26,989 parcels under an abatement of some sort, causing $145 million diverted annually in just that one county.
Dublin (suburb of Columbus) has 42 deals active right now, with a value of $252 million:
https://dublinohiousa.gov/tif-tax-increment-financing/
What’s worse is, Policy Matters Ohio computed that the state hands out $16.4 billion in various tax breaks to businesses like Amazon and Intel:
Funnily enough, if they didn’t hand out those abatements, they might have enough money to plug the gap in funding that’s going to open up when we abolish property taxes entirely.
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Categories: Community Activism, Free Speech Zone, Real Estate Taxes, Uncategorized