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Tax breaks for business relocations fuels sprawl in Northeast Ohio, largest study of its kind finds

Marc Lefkowitz  |  07/08/11 @ 10:00am  |  Posted in Vibrant cities

A study that claims to be the largest ever done in the United States of subsidized business relocations indicates that property tax breaks given to entice companies to move within the Cleveland area have worsened wealth inequities in the region and have fueled suburban sprawl.

The study, released by the nonprofit research center Good Jobs First and financed by the Ford Foundation, is entitled, "Paid to Sprawl: Subsidized Job Flight from Cleveland and Cincinnati."

The study cites 164 companies that were given what it called "lucrative property tax breaks" as they moved facilities around within the Cleveland and Cincinnati metro areas. Good Jobs First said the subsidized relocations, affecting an estimated 14,500 workers, "were overwhelmingly outward bound and by many measures fueled suburban sprawl, especially in the Cleveland region."

"By dispersing jobs away from the urban cores, the relocations worsened inequalities in wealth and opportunity," the nonprofit said. "They moved jobs away from areas hardest hit by plant closings and with higher rates of poverty, unemployment and people of color to more affluent and less diverse areas."

To address the problems created by the tax breaks, the study recommends that the state encourage the creation of cooperation systems among local officials and anti-poaching agreements like those in effect in Montgomery County (Dayton) and Summit County and that are being considered in Cuyahoga County.

To reverse what Good Jobs First said is a decline in transparency related to these tax breaks, the study recommends that the cost and benefits of all economic development deals be disclosed online. It also advocates regional revenue-sharing in order to reduce tax-base competition.

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