'Not business friendly' post #16 - I told you so

How I wish I were wrong...but I did tell you this was going to be a problem.

Today the Lucas County Commissioners hold the first of two hearings (at 2 p.m. in the Commissioner hearing room on the first floor of Government Center) on the proposal to increase the Lucas County Conveyance Fee from $3 to $4.

The conveyance fee is a tax for transferring any property within the County. The fee is charged per $1,000 value of the home, so a $100,000 house would have a fee of $300 or, if the increase is approved, $400.

The claimed purpose of this increase is to fund the Lucas County Improvement Corporation, as recommended by a 'task force' the Commissioners put together to address many of the issues that were arising and the criticism from Comm. Ben Konop.

Comm. Pete Gerken supports the idea, but Comm. Tina Skeldon Wozniak has been non-committal in her public comments. Comm. Konop opposes the tax, saying we don't need another tax in the county, but his main objection is not the tax, rather the intended use. He wants to destroy the LCIC and failure of a source of funding would help. Interestingly, he was much more receptive to the idea of using the tax for a housing fund, as suggested by Toledo Councilman Joe McNamara.

The LCIC was re-created in 2005 following the election of Pete Gerken as a commissioner. Originally - and prior to being sworn in as a commissioner - he met with current Comm. Wozniak and then Toledo Mayor Jack Ford to discuss merging the county and city economic development efforts. Unfortunately, when he shared with me this idea, I had to inform him that such a merger was not allowed under Ohio law.

Plan B was to take the existing LCIC and reorganize it into a different type of entity, including designating it as the county's economic development agency and expanding its staff. Gerken's thought was that the new LCIC would somehow get the proceeds of the Port Authority tax levy, in light of the separation of the Regional Growth Partnership (which had been funded with those dollars) from the Port Authority and its re-establishment as a completely privately-funded, business-led economic development agency.

My objections to Gerken's plan was that it created a large bureaucracy, put all the power in the hands of the elected Mayor and the majority of the Commissions (as they got to make appointments), and had no source of funding to meet the increased budget costs that would result from the re-organization.

As I said at the time, the devil is in the details - in this case, the details on how the entity was to be funded. But that didn't dissuade Gerken and Wozniak who went ahead anyway with new offices, new staff and additional costs.

Now, especially with the financial situation in the county, they don't have the funds necessary for the organization to continue in its present form.

Enter a new tax - the conveyance fee increase.

At the time, I told them that the only way they could generate the amount of money necessary to support the structure they were proposing was to spend county dollars for the expansion - or to raise a tax due to the dwindling amount of available funds within the county's general fund.

The Commissioners, in setting up a 'task force' to 'examine' the issue and 'make recommendations' have a degree of deniability when it comes to this new tax - they think. However, we all know that the responsibility falls firmly at the feet of Pete Gerken and Tina Skeldon Wozniak for refusing to address this issue BEFORE going ahead with the new structure.

Please don't get me wrong - I support the idea of the LCIC and believe it has been highly successful in getting all the jurisdictions in Lucas County working together. That's a major accomplishment. But it could have had that success without the internal structure Gerken created - and it wouldn't now need a new tax to support it - if anyone would have heeded my questions and concerns at the time.

Now we are faced with a dilemma - how to fund the organization that is an established and important part of the economic development tools we offer in Lucas County. The way to attract people and businesses to this area is NOT to make them pay more in taxes for the privilege of coming here or growing here. That point seems to be missed by many who hold elective office in the County and City offices.

Strange that no one is talking about how the size of the organization can be reduced, or how it can work with some of the other economic development entities to reduce its costs of operations - or even if it can perform some of the public sector activities under the original structure before Gerken redesigned it in his own image.

No, such ideas are never discussed or considered - especially by the creators of the problem.

This tax is not business friendly. And it's a bit contradictory that the Commissioners have a Foreclosure Task Force to help people avoid foreclosures on their homes at the same time they're seriously considering raising the cost of actually selling that home. And then there are the housing fund advocates who have, for years, wanted that tax for themselves, saying that the money spent in the county on economic development is enough while the money spent on housing isn't and needs have permanent local funding.

So all the housing fund people are in favor of raising the tax with the caveat that they get some of it. Of course, all the people in favor of raising the tax are the recipients/beneficiaries of the tax - imagine that!

The Toledo Board of Realtors has announced their opposition to the tax, for the reasons stated here - it's just one more nail in the coffin of the county, making one more excuse for someone to go elsewhere.

Personally, I think the Commissioners deserve the struggle they're facing - I told them this would be the outcome, though I hate that I was right.

ASIDE: This is the same warning I issued over the new arena being built - the funding stream was not sufficient to meet the projected costs. The Commissioners recently passed a resolution pledging to cover any shortfall between funding stream and costs, pledging the taxing authority of the Lucas County to the purpose. I'd like to be wrong on that prediction, but I'm not hopeful.

And one final thought: if the Commissioners were really as interested in economic development as they say they are, why did they allow increased tax levies, including a new tax for COSI, to go on the ballot??? Inquiring minds...