Background
Springfield Township is a diverse community with many distinctive neighborhoods. Because of its location and amenities, Springfield Township is a predominantly residential community. Approximately 60% of the Township’s land use is residential, 30% is used for purposes which are exempt from paying any property taxes (schools, churches, Hamilton County Park District) and 10% is business. Springfield Township, like all townships in Ohio, has historically received the revenue it requires to provide services to its residents from property taxes enacted by Township residents, estate taxes paid by Township residents, and revenues it receives from the State.

Financial Challenges
In 2011, the State Legislature dealt the Township a devastating blow by enacting sweeping changes to Ohio law which eliminated a majority of the Township’s state funding sources. These legislative changes completely decimated all of the Township’s financial planning and its 5-year budget projections. With these changes and over only a 2-year period of time, the State Legislature eliminated the estate tax, the tangible personal property tax, the public utility tax, and reduced the Township’s share of Local Government Fund revenue by over 60%. Since 2013, these reductions amount to a loss of nearly 2.5 million dollars to Springfield Township each year. More than $2 million of the reduction in revenues is in the Township’s General Fund and depletes that fund by more than half of its total annual revenue.

Budget Cuts Made
Through tailoring services and programs to those deemed critical to the residents, eliminating staff by consolidating job tasks and positions, reducing employee benefits, instituting “user pays” fees for parks and recreation, modifying senior center rental fees, and creating innovative operational, programming, and internal consolidation efforts, the Township reduced General Fund expenditures by 35%. Even with these changes, there is not enough funding to sustain current operations without additional revenue.

Springfield Township has engaged its residents and businesses for over a decade in determining the course of the Township and the services it provides. The Township knows what the residents expect in terms of service. However, the Township also knows that its property tax revenues and the dramatically reduced state revenues it receives will not enable it to provide those services for more than a few more years. For this reason, the Board of Trustees and the administrative and departmental leadership of the Township spent the majority of 2013 focusing on how to bridge this gap. All in all, it came down to increase revenue or drastically reduce services. Given the amount of the financial gap and the reductions in service that have already taken place, the Board of Trustees had no real choice – it had to raise revenue and do so relatively quickly.

Choices
Only 2 methods are available to townships to increase revenue: (1) increasing property taxes on the 70% of Township property owners (residents) who are already shouldering the burden of paying for Township services; or (2) creating a Joint Economic Development Zone (JEDZ) in which a tax could be imposed on the payroll and net business profits of businesses located within the zone. The Board of Trustees chose to pursue the creation of a JEDZ because by doing so, the tax burden on Township residents could be reduced, while some of the businesses and employees who pay no property taxes to the Township in return for the services they receive would be required to pay the tax. The Trustees also decided to create a Community Improvement Corporation to provide financial grants to Township residents who work in the JEDZ area (and would be subject to the JEDZ tax) to encourage them to continue to live in the Township.

Details of The JEDZ
The Township worked with the City of Mt. Healthy to create the JEDZ and agreed that if the JEDZ was created, a tax rate of 1 ½ percent would be imposed. The decision on whether the JEDZ was actually created and the payroll tax imposed on businesses and employees within the JEDZ area was ultimately made by the residents of Springfield Township, who voted to approve the JEDZ on May 6, 2014.

Even though the JEDZ was approved, the revenue generated from the payroll tax will not fill the entire financial gap created by the State Legislature’s sweeping cuts in the Township’s state revenues. It does, however allow the Township to continue its current level of services to residents and helps implement the current long-range revenue-producing plans to develop others. For instance, in the next 5 to 10 years, the Township will continue to pursue providing services to adjoining communities through shared service agreements, pursue legislative changes needed to internally consolidate at least some of the Township’s fire/police services, pursue legislative changes to the manner in which Township levies are structured so that residents can vote to establish a combined Township services levy’ and pursue the completion of critical aspects of the Township’s Comprehensive Neighborhood Master Plan and continued economic development efforts. Only through a combined, and ever-evolving strategy and planning can the Township achieve long term financial stability while continuing to provide its residents with the excellent public services they expect.