Is PILOT (Payment In Lieu of Taxes) A Good Idea for Bexley?

The anti-Issue 24 campaign is in full swing, and with it has come a storm of confusion, misconception, and just plain false information regarding the context, scope, and future of Bexley's financial crisis. However, every cloud has its silver lining, and one of the positive results of any dialogue of this sort in the community is the way that it causes us all to explore new ideas and possibilities.

The main revenue idea being proposed by opponents of Issue 24 is the concept of PILOT - or Payment in Lieu of Taxes. Specifically, they point to the Pittsburgh and Providence models, where colleges and universities are assessed a special fee for each enrolled student. PILOT is essentially a tax on students. In Pittsburgh and Providence, it ranges from around $200 to $300 per year per student. If we implemented it in Bexley at one of the higher rates, it would raise around $800,000. Here are some fairly important points to consider when thinking about PILOT:

• When we talk PILOT, due to its scale we are really talking Capital - all of the other schools and religious organizations are small in comparison. Capital University is the city's largest payroll base - they are substantial contributors to our income tax base. So from the city's perspective, they are a contributing, tax-paying entity. Capital is very important to the city as an employer. If we implemented a municipal PILOT concept, we would be the first in Ohio to do so (as far as I can glean), and we would severely compromise our relationship with Capital and our other non-profit entities. CSG, Capital, St Charles - all are very important to the city, and their location in Bexley is part of what helps our community thrive. We need to be incredibly sensitive to how this sort of a concept would negatively impact our cultural/educational wealth.
• While PILOT is something to think about and consider, it only makes up for at most 1/3 of the state cuts.
• PILOT has been implemented in communities in States where local entities have lower local income tax rates or no local income tax at all - places where universities' tax profiles are quite different than Capital in the context of Bexley. With Capital and our schools, this is not the case. This is why PILOT is not really a common concept in Ohio, except for with school districts where PILOT seems to exist in some specific circumstances in order to offset property tax losses.

I think we should explore PILOT. And if after digging deep into its implications for our community we feel that it's a good idea, we should use income generated by it or other non-traditional revenue options as an opportunity to stabilize our budget beyond the current 5-year projections. The city will be in a tight spot financially even if Issue 24 passes, and any new revenue ideas will need to be seriously considered and implemented as appropriate. Keep in mind the city has already carved $1.7 million in savings from its budget leading up to and as part of the remedy for the state budget cuts ($800k a year prior to the state cuts, plus $930k per year in conjunction with Issue 24) - Issue 24 is not going to replace these cuts - it is simply avoiding the necessity for further cuts. So any revenue able to be raised to help the city begin to recover will be needed and very helpful.

Creative, alternative revenue ideas are constantly being considered and talked about at city hall, and among the many Bexley residents who give so much to the city on a daily basis. It's good to come up with and bounce around new ideas, and it's important that we do so. And while ideas come easily with as diversely talented a resident base as we have, it's much harder to find realistic, sustainable, and sufficient sources of non-traditional revenue for Bexley. We can't afford to not be creative, but we also shouldn't be fooled by those who are in denial of the fact that the city has lost 25% of its income, is already stretched to begin with, and needs budget stability today to a degree that will require substantially more revenue than the sum of any of the non-traditional ideas that are currently being considered.

I believe that Issue 24 is what Bexley needs today. If you're still on the fence, I encourage you to visit the campaign's website at www.bexleyissue24.com, where they've compiled very thorough and accurate information about the city of Bexley's budget situation and the implications of passing - or failing to pass - Issue 24.