Village to schools: Give us the taxes
Lordstown’s new battery-cell plant expected to seek abatement
LORDSTOWN — Village officials are asking the Lordstown Board of Education to waive receiving income tax from any tax abatement request by General Motors for a proposed battery plant in the village.
Mayor Arno Hill and members of village council met Thursday with school district Superintendent Terry Armstrong and board members about what could be taking place in a few weeks with the company.
“We are trying to lay the ground work to get the battery plant here. Time is of the essence. We do not have the official abatement request yet, but we have had dialogue due to the fact the state took the personal property tax away from the schools,” Hill said.
He said while the village has done 100 percent tax abatements in the past, he predicts it will possibly be a 75 percent, 15-year abatement request for a 2.5- to 2.75-million-square-foot facility for the battery plant. Hill said the official application is expected in a few weeks from GM.
“Any time the village is involved in a tax abatement request of more than 50 percent, it is required to enter into an income tax sharing agreement with the schools. We have approached the schools asking to keep all the income tax on this project. The village’s main revenue stream has been declining in the past three years. We need this for our budget and can’t share the income tax. We want to make this project a win-win for everyone,” Hill said.
Hill said the district would still get the property tax, which could be $500,000 to $600,000.
Officials said the battery plant could bring 1,100 jobs with a payroll of $45 million, meaning $450,000 in income tax. Hill said the village took a financial hit when GM quit building the Chevrolet Cruze and shuttered its Lordstown assembly plant.
The Trumbull Career and Technical Center Board of Education also would have to act on not receiving income tax, too, as funds from the village go to the career center.
Hill said bringing in new business to generate funds is the best way for the village to bring in revenue as opposed to raising taxes or cutting services.
Armstrong said school districts have the right to get 50 percent of the income tax from any tax abatement over $1 million. He said the district would expect $600,000 in property taxes from such a project.
“We are all here for Lordstown and doing what is best for the community,” he said.
Hill said whenever there is an abatement, the schools get a large portion of funds. He gave the example of the TJX HomeGoods distribution center in which the schools are getting $400,000 and the village $135,000.
Lordstown officials last January approved a 75-percent, 10-year tax abatement for TJX HomeGoods on the construction of a new distribution center on Ellsworth Bailey Road. However, the enterprise zone agreement does not excuse TJX HomeGoods from all taxes. The abatement only applies to the tax that would be levied against the increase in value of the property once the facility is constructed, tooled and operating. In exchange for the abatement, which is expected to save the company between $100,000 and $125,000 per year, the company promised the school district $500,000.
“With the other abatements, the schools have always gotten more, which we have no problem with that, but now our economics are much different,” he said.
Hill said he has spoken to GM officials who said they would like to break ground in April.
“There are a lot of hoops that need to be jumped through in a short period of time,” Hill said.
Official action will need to be taken by village council, TCTC and the board of education in February after the application is submitted.
“General Motors is gone, and we need to pick up the pieces. This is very time sensitive,” Councilman Ron Radtka said.
Board of Education President Cheryl Kistler said the board will review the request. Board member Jackie Woodward said 15 years is a long period of time for no income taxes because 20 percent of the school’s budget is from school levies.
It was reported in October 2018 that in exchange for a tax abatement with Clean Energy Future for the Lordstown Energy Center and Trumbull Energy Center, Lordstown Schools would receive a base donation of approximately $16.1 million over the 15-year abatement period in addition to sharing with the village net profit tax projected to be between $500,000 to $750,000 annually once the plant is in operation, as well as sharing of income taxes.
The total revenue for the school district over the 15 years of that abatement is projected to be between $24.1 million and $27.9 million. Armstrong said previously the agreements with Clean Energy Future will guarantee they will not have to ask residents for additional funds for the next 20 years.
Board member Carla Click said the village and school district need to work together.
“There needs to be some compromise whether we like it or not to help the village,” she said.
Hill said the NorthPoint property the company is looking at for the plant is located in a community reinvestment area, which will be administered through the village and not require county approval like an enterprise zone does.