ROLDO RIGHTS ON: THE TAX DODGERS
OF CUYAHOGA COUNTY…

September 5th, 2014

roldo table 140905Click on the above image to download the entire tax abatement file for Cuyahoga County.

Has it now become necessary for cities to bribe each and every developer or corporation?

With tax breaks as a location lure? Stealing from city revenues.

If you build or renovate new or old building is it necessary for someone to slip you a big bonus? Is this the new Mafia? It smells of a criminal operation. Scent of Robber Barons of old.

And is it just taken for granted that others (us) simply have to shell out more in property taxes to make up the difference? We suckers, that is.

The answer appears to be “Yes.” and the numbers are shocking for all Cuyahoga County residents.

The give-away of scarce revenue resources by Cleveland and Cuyahoga politicians is a much scarier proposition than the corruption scandal of the politicians on the take. But the FBI is nowhere to be found. It’s all technically legal. Morally, however, corrupt.

How much tax dodging happens in Cuyahoga County?

A lot more than you’d expect.

Would you believe that some portion of the property value of more $2 billion escapes taxes that normally go to government coffers – city, county, libraries and sometimes schools? It would pay for teachers, firefighters, police, garbage collectors and more.

Stay with me for this awful ride.

If you have been reading me you know that the Progressive Field, Quicken Loans Arena and Browns football stadium pay no property taxes on their sports facilities, built and – what shall we say, more than spruced up now – with hundreds of millions of tax dollars.

Yet there are no property taxes on their costly facilities.

They were exempted by the State of Ohio, thanks in large part to former Mayor Michael White and former County Commissioner Tim Hagan. Both, now retired, are teaching public policy at local colleges.

Let’s start to tote up the score.

At Gateway, Dan Gilbert and Larry Dolan escape paying property taxes on $176,250,000 baseball stadium and basketball arena. Every year. Every single year you pay property taxes, they don’t. (Gateway does pay on the land.) The tax bill on the $276 million (35 percent of value is taxed) would be for 2013, $6,114,883 (In 10 years, more than $60 million in lost revenue). The portion NOT paid to the Cleveland schools is $3,708,937 (or $37 million in 10 years) according to a Cuyahoga County finance official. (Add to this its $240 million subsidy paid via the sin tax and the more than $110 million paid by the County and City on bonds for arena overruns with the meter still running). It’s a lot of money.

Cleveland Browns billionaire Jimmy Haslam escapes paying property taxes on a facility worth $276,200,000. Every single year. (He also pays not a penny on the $19,007,400 on the land value, as the City of Cleveland citizens pick up that tab for him.) The tax bill on the $276 million facility should bring taxes of $9,581,332 each year, according to the County official, with $5,812,246 of that lost by the Cleveland schools. This adds up to more than $95 million and $58 million from the schools in a decade. (Add to this the second round of sin taxes for the Browns stadium of $120.3 million with the meter also still running.) Shameful.

The free property taxes run year in year out. Forever!

Are we taxpayers overly generous or what?

By the way, these are figures before the new improvements, which will increase the value. And you—if you live in Cuyahoga County—will pay for improvements, as you voted to extend the sin tax for 20 more years at some $13 million a year, or another $260 million.

Then we get to the issue of tax abatements. They are now dished out by Cleveland and its suburbs as John D. Rockefeller handed out dimes to children. It’s almost automatic.

In Cuyahoga County as a whole the total tax free is $722,339,500. And I asked only for those with a value of more than one million dollars. That nearly three-quarters of a billion dollars on the books now. Massive tax leakage

Cities fighting each other to give away money. Your money.

This is a merry-go-round cities have to stop.

Then we get to the issue of Tax Incremental Financing, another form of diverting taxes from ordinary governmental use.

TIF, to make it simple, diverts property taxes (which are paid by the property owners) to costs of a particular development. In other words, the taxes are paid by the property owner but at least a portion will not go to the normal uses—city, county and libraries. Instead, the money goes to pay infrastructure costs, often for the same property owner.

The total value of property under TIF is $2,349,694,300 and the TIF value is $1,184,436,100 in Cuyahoga County. Some of the tax collected on $1.18 billion of value is being exempted from normal governmental revenue distribution, although the school systems in deals made with them are still being made whole on a majority of this value. (For example, some taxes on Tower City pay for financing of the Rock & Roll Hall of Fame, nowhere near the tower.)

This information and aid with the figures was provided by Joseph Micciulla, Tax Incentive Review Chair of the County Fiscal Department.

We are talking about money, real money, big money.

And this doesn’t include numerous state incentive programs that pile more millions of dollars into the same projects given these subsidies.

The corporate gifts flow like the Mississippi. But green. And tax free.

In many cases these subsidy gifts are being given to corporations or developers simply to keep them from moving to another Ohio community or to entice them away from a neighbor.

It’s spiraling out of control.

Now, everyone expects a handout.

Talk about welfare. Here it is. Pure corporate welfare for the wealthy. And no one is asking the recipients to take drug tests.

The news media that ignores this open theft without as much as a yelp of notice.

And I might remind you that some of the biggest tax gifts took place in the late 1980s to Dick Jacobs and the Ratner Forest City Enterprises developments on Public Square. They were 20-year abatement deals that have run the course at the Ritz Hotel, the Marriott, and Key Center. These cost taxpayers the loss of more than $120 million in lost tax revenue.

Numerous other government subsidies often go along with the abatements and TIFs. Too many for me to list but I suggest that those interested go to Policy Matters Ohio for crucial information on this subject and others.

Who can we blame for this theft of tax revenue?

You and me. But we really have no vote in the matter. The public has little control of its public agenda.

The Cleveland Foundation, the Gund Foundation, the Greater Cleveland Partnership. These are institutions direct the public agenda. (We see it right now with the renovation of Public Square, guided by its propaganda mouth, Steve Litt and the Plain Dealer.)

These are the Power forces that direct the Public Agenda. They favor the already rich.

They do it through compliant, cooperating politicians as George Voinovich, George Forbes, Michael White, Tim Hagan Frank Jackson and a host of others. Those always ready to vote the corporate line.

Of course, there are many others, starting with the Ohio Governor and state legislators who pass the legislation that allow this wholesale give-away to proceed under legal means of taking from those who don’t have to give to those who have most.

Here is one TIF project in Beachwood, just a small example:

Eaton Corp.—Some portion of a TIF value of $141,338,100. In addition, the Eaton project on land opened by the Chagrin Highland deal in 1989 between Cleveland and various suburbs got $15.5 million in state loans, tax credits worth some $53 million; $1.25 million in new road work to its project, some $10 million in tax credits, according to the Plain Dealer. (Eaton Corp.—since these tax breaks—has moved its corporate headquarters to Ireland to escape American income taxes. Shows what generosity to corporate interests does.)

And a few more:

  • Forest City Publishing (You know them): $25,220,700.
  • Progressive Casualty: $84,083,000.
  • Cleveland Clinic: $7,829,200.

Finally, by clicking on the graphic at the top of this story, you can examine the whole list of abatements.

May I add that I’ll be taking some time off and will return when I return. Until then, plenty of my past articles bear a return visit. Thank you

Roldo has been covering Cleveland political and other characters for nearly 50 years. He has been called “arguably Cleveland’s greatest investigative reporter of the past half century” by Ralph Nader in 2014.

Others also have been generously complimentary:

“There are–in my experience \–-only a handful of journalists in America like him. He’s a citizen journalist, the finest kind of idealist you’ll ever find… Roldo actually believes in American democracy and the American people. It’s easy enough to say someone is a muckraker, but Roldo is much more than that. He’s a reporter with rare insight.” –Jim Ridgeway, then of Village Voice, 1993.

“As an elected public official, I have received my share of ‘hits’ from Roldo. But unlike my experience with other news media, I have never challenged Roldo’s criticisms as being unfair, unsupported by the facts or discriminatory in any way… Cleveland owes Roldo Bartimole a debt of gratitude. –Judge Carl Stokes and former Cleveland Mayor, 1993.

“It’s always high noon for Roldo Bartimole, last of the gunslinger journalists.” –Bill Osinski, article in Akron Beacon Journal, 1983.

The Cleveland Memory Project: Roldo Bartimole’s Point Of View.

Roldo Bartimole at Have Coffee Will Write.

One Response to “ROLDO RIGHTS ON: THE TAX DODGERS
OF CUYAHOGA COUNTY…”

  1. […] I reported last September that Cuyahoga County has awarded tax abatements of $722,339,500. I asked only for abatements of more than $1 million. Also reported to me by the County that $2.3 billion of properties have some tax incremental financing attached to their properties. The actual loss of revenue was unknown. You also will see the loss of revenue from the sports stadiums here, all tax exempted forever. […]

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