NILES Council to act on MCI tax plan
The mayor and the school district couldn't reach an agreement, so an income tax split kicked in automatically.
By DENISE DICK
VINDICATOR TRUMBULL STAFF
NILES -- City council is expected to consider legislation this week that would allocate half the income taxes it collects from MCI Worldcom to Howland schools.
Council approved a 10-year abatement on property taxes in 1999, giving MCI a 100 percent abatement in the first three years, 75 percent the next four years and 50 percent the final three years.
Under Ohio law, when a company with an annual payroll of $1 million or more gets a property tax abatement, the municipality and the affected school district must work out an agreement to share the income taxes paid by company workers, said Daryl Hennessy, manager of the office of tax incentives for the Ohio Department of Development.
That hasn't happened in this case.
At the time the abatement was approved, the company estimated an annual payroll of about $15 million for 665 full-time workers and 540 part-timers.
Thomas Krispinsky, Howland schools treasurer, sent a letter to the city requesting the school district's portion of the payroll taxes paid to the city for 2000.
The company is on a section of U.S. Route 422 in Niles, but which is part of the Howland School District.
Mayor Ralph A. Infante Jr. said the city plans to send the money, but he wanted to wait until all of the 2000 taxes have been collected.
Negotiations: Infante said he wanted to negotiate a graduated income tax-sharing agreement with 50-50 split the first three years, about 40 percent for the school district the next four years and about 25 percent for the final three years.
"We never came to an agreement," he said.
According to law, if the municipality and the school district don't reach an agreement to share the income taxes, the taxes are split 50-50, Hennessy said.
The amount generated from the city's 1.5-percent income tax hasn't been determined, Infante said.
The legislation will allocate half of the money that has been collected so far.
"We can only pay on what's been collected," said Neil Buccino, city auditor.
Council meets at 6 p.m. Wednesday.