First the new governor decides to privatize the Ohio Department of Development. Then he also makes sure that universal tax cuts stay in force so that Ohio can be a more “business friendly dtate”- then he turns around and hands his biggest donors some extra help in the form of an “Enterprise zone”- special tax breaks for those on the “Friends and Family” government plan:
Gov. John Kasich, in his State of the State speech Tuesday, repeated a proposal to encourage business development near Wright-Patterson Air Force Base by creating an enterprise zone to grant tax incentives to companies that would locate there….
The governor gave no time frame Tuesday for establishing the enterprise zone, said his press secretary, Rob Nichols….
The Ohio Department of Development describes enterprise zones as designated land areas in which businesses may receive tax exemptions on new investments that meet pre-defined criteria, to encourage investment in the targeted areas. Defense contracting companies already fill much of the commercially zoned land within several miles of Wright-Patterson.
The enterprise zones can allow a community to attract the type of business it wants to attract, and the incentives can make the land more attractive for business investment, according to the summary on the Department of Development’s website.
But the department also gives this caution: “Because of the far-reaching effects of tax incentives, the enterprise zone should be used as a tool of the last resort. A community should attempt to satisfy the business’s needs through other assistance programs prior to considering tax incentives. In all cases, enterprise zone agreements should be negotiated cautiously.”
With the Dayton metro area already well overbuilt- our governor is about to encourage large companies to break leases and relocate into a reduced or no-tax zone, creating more vacancies and eroding the tax base of other parts of the community.
We’ve already seen what has happened to Downtown Dayton- with a 30+% vacancy rate, and as MVRPC has consistently pointed out we are already overbuilt.
Any time that tax rates are used to incent one business or location over another- it is harming a competitor or another community. It is time for a federal ban on all State and Local uses of tax breaks to compete for jobs.
Our tax code is already a tangled hot mess. By allowing more of these exemptions and preferences, we’re only making our country less free and competitive, not more. This is corporate welfare, nothing more, nothing less.