GCP-Commissioned Tax Analysis Released

The Greater Cleveland Partnership’s (GCP) strategic plan, ForwardCLE, calls for a better understanding of our collective tax climate and today data from a GCP tax analysis was released.  GCP members commissioned EY to analyze our region’s tax environment and its impact on growth and competitiveness as compared to ten similar markets in the Great Lakes region:  Buffalo, Cincinnati, Columbus, Detroit, Indianapolis, Kansas City, Milwaukee, Nashville, Pittsburgh, and St. Louis.  The information included in the tax study resulted in GCP members calling for increased community collaboration and the exploration of potential systematic solutions.

“The study shows our residents face a disproportionate tax burden,” said Scott Chaikin, Executive Chairman of Dix & Eaton and Chair of GCP’s Board of Directors.  “It also points to the need for systemic solutions.  We will do additional research to better understand specific opportunities to improve our systems and structures and will convene future conversations with other community stakeholders to explore what changes are possible.”

The study concludes most of Cleveland’s advantage is a result of state-level tax competitiveness.  While absolutes cannot be surmised from any one tax study, no matter how comprehensive it is, the initial data also explains Cleveland’s per capita state and local tax collections ($5,426) exceed the average burden ($4,794) levied on comparable cities in our region.  At the state level, Ohio’s taxes are relatively competitive with peer states, with per capita taxes of $2,469, or 7% lower than the $2,646 benchmark city average per capita tax burden.  In contrast, Cleveland’s local taxes averaging $2,958 per capita are 38% higher than the $2,148 average per capita tax collections in the benchmark cities.  The study did not examine the level of revenue sharing between state and local governments.

“Initially, the study was intended to help us better understand our voting decisions and their collective impact, but the stark difference in our tax levels with neighboring peers shows that a ballot-by-ballot approach isn’t sufficient to create a positive competitive trend for the future,” GCP President and CEO Joe Roman stated.

Feedback from GCP members will continue to be the key part of decision-making going forward, as GCP uses the data compiled in the tax study to analyze specific proposals when an institution or campaign is seeking GCP’s endorsement of a specific issue.

“The purpose of this crucial exercise is not to single out any one tax or entity, but to better understand how our community should critique and properly question levy requests in the future,” added Kevin Johnson, Managing Partner at NexGen Interactive and the Chair of the GCP study group.  “Thankfully, we live in a generous region and GCP members understand the strong need for many of these worthy initiatives.  Frankly, we’ve been supportive of most of them. We also recognize, however, that we need more information, our fellow citizens are depending on our support, and our cumulative ability to raise taxes is not limitless.”

GCP will strongly encourage entities that seek to alter a tax structure to clearly communicate their objectives early in each election cycle and adhere to GCP’s member-driven review process and new protocols on awarding campaign funds. Included among the many factors our business leaders will continue to consider, when analyzing future tax proposals that could harm our progress, are: the purpose of the tax levy; the services or benefits it aims to provide the taxpayers; the precedent in other communities for the type of levy and a comparison of rates; alternatives considered by the proponents; and, accountability measures built into the proposal.

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  • Next up: GCP Members Recommend 2019-2020 Advocacy Priorities

    GCP Members Recommend 2019-2020 Advocacy Priorities

    The mission of the Greater Cleveland Partnership is to mobilize private-sector leadership, expertise, and resources to create attractive business conditions that create jobs, grow investment and improve economic prosperity in the region. GCP releases a member-driven public policy agenda every two years.

    Growth and innovation will require a continued focus on fundamental priorities:

    1.) An Adaptable Government and Public Sector;

    2.) A Sustainable & Predictable Tax & Regulatory Environment, and

    3.) Talent Development & Retention to Advance Business Growth.  Forging an inclusive and equitable region will continue to be a fundamental part of GCP’s priorities. Below is a summary of the 2019 – 2020 GCP Public Policy Agenda.

    An adaptable government and public sector

    • Protect and renew the Ohio Third Frontier program.
    • Provide grant assistance for brownfield redevelopment based on site strategies and connection to major job hubs.
    • Explore possible JobsOhio enhancement in Cleveland and other metro areas of Northeastern Ohio—built off the complimentary approach established between JobsOhio, TeamNEO, and GCP in 2017.
    • Maintain investments in the Ohio New Market and Historic Preservation Tax Credit program.
    • Create a statewide Opportunity Zone to compliment the federal program in underserved communities.
    • Restore state general revenue funding for public transit.
    • Encourage municipal shared services policies to continue and evolve.
    • Protect Ohioans’ data and transactions with sustainable, user-friendly processes for government interactions – permits, certificates, licenses – through secure technologies.
    • Guard the Ohio Constitution via greater petition transparency.

    Sustainable and predictable tax and regulatory environment

    • Implement greater government efficiencies without shifting tax burdens from one group of businesses to another.
    • Preserve the Ohio small business tax deduction on the first $250,000 in business income.
    • Lower or maintain the commercial activity tax (CAT) rate and uphold the exemption level.
    • Encourage entities that seek to alter a tax structure to adhere to GCP’s new levy protocol.
    • Reduce the complexity of regulatory compliance utilizing new or existing processes.
    • Expand the Ohio Common Sense Initiative (CSI) with proper legislative oversight.
    • Support and monitor the public review of occupational licensing boards.
    • Ensure employers are not prohibited from establishing and enforcing a drug testing policy, drug-free workplace policy, or zero-tolerance drug policy.

    Talent development and retention to advance business growth

    • Audit Ohio’s workforce development and job training programs to assess performance and determine what “flex” funding is available to steer towards priority opportunities.
    • Support the scale and growth of industry sector partnerships through an RFP process in core industries like advanced manufacturing, healthcare, infrastructure, and information technology.
    • Maintain the Job Creation Tax Credit program.
    • Increase funding for incumbent workforce training.
    • Develop a population growth agenda to assist in retaining Ohio’s best talent, including supporting the creation of immigration hubs in key regions of the state.
    • Reestablish the Minority Business Advisory Council (MBAC) and include representation from JobsOhio leadership.
    • Review the Minority Business Enterprise (MBE) and Encouraging Diversity, Growth and Equity (EDGE) programs for necessary legislative and regulatory reforms.
    • Encourage state funded organizations to achieve a minimum of 15% spending with minority businesses.
    • Create additional opportunities and improve access to early-stage and working capital—particularly for small and minority businesses statewide.
    • Support long-term immigration reform at the federal level in addition to comprehensive H-1B visa reform that increases the number of visas for highly skilled talent.

    Fundamental priorities

    • Advocate for LGBTQ protections that add gender identity and sexual orientation to the protected classes under civil rights laws.
    • Continue to support the Cleveland Plan for Transforming Schools.
    • Oppose any efforts by the legislature to discontinue the Historic Preservation Tax Credit or convert it into a block grant.
    • Support reauthorization of the EB-5 program in the short-term and permanency long-term.
    • Support the development of transformational public projects, such as development along the lakefront and Cuyahoga River, including Irishtown Bend and the Flats; Opportunity Corridor and the W. 25th Street Corridor, including the MetroHealth Campus Transformation project; and support for the Great Lakes through the Great Lakes Restoration Initiative.
    • Support business expansion and development opportunities at NASA Glenn Research Center.
    • Create a state Office of Military and Federal Affairs to ensure a single point of contact for Ohio on defense and federal asset issues.
    • Obtain commitments for an international air service attraction fund to attract a direct flight to Europe on a full-service airline.
    • Preserve Ohio’s CyberOhio Advisory Board and enhance technology industry support services and resources.
    • Encourage policies that provide incentives for utilities to offer businesses opportunities that leverage energy efficiency programming; recognize it is equally important utilities are provided the level of elasticity needed to meet state mandated energy benchmarks.
    • Support Medicaid expansion in Ohio.
    • Study health care mandates that limit an employer’s ability to offer coverage.
    • Improve the solvency of Ohio’s unemployment compensation system.
    • Guard workers’ compensation safety education assistance and transitional work programs.

    Collective action and partnerships

    • Continue to lead and engage with state and national coalitions that advance GCP’s work.
    • Grow the GCP Political Action Committee (GCPPAC) by building and reinforcing relationships and supporting candidates and current elected officials at the state and local levels of government.

    Read the full agenda.

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  • Next up: GCP Offers Testimony in Support of the Ohio Fairness Act

    GCP Offers Testimony in Support of the Ohio Fairness Act

    Last week, GCP submitted proponent testimony supporting the passage of Senate Bill 11 (SB 11), or the Ohio Fairness Act, to the Ohio Senate Judiciary Committee. SB 11 was introduced by Senator Nickie Antonio, who represents the western third of Cleveland and some nearby westside suburbs, in early February and prohibits discrimination on the basis of sexual orientation or gender identity or expression. Speaking of the bill, Antonio stated, “It is a fair proposal that will simply give people who are lesbian, gay, bisexual, or transgender the same freedom to work, the same freedom to live where they choose, and the same full, equal participation in society, just as anyone else in Ohio.”

    In its testimony, GCP highlighted its history of support for statewide protections of the LGBTQ community. For example, GCP joined Ohio Business Competes, a non-partisan coalition of more than 600 companies and organizations—including member companies like Eaton, Sherwin-Williams, and KeyBank—that is committed to achieving nondiscrimination policies at the state level in order to attract the best talent, to increase business-to-business and business-to-consumer relationships, and to grow Ohio’s economy. GCP believes that the Ohio legislature acting to ensure that basic civil rights of all Ohioans are protected remains a critical part of the work we must do to create the economic conditions for our state, and its residents, to thrive.

    Read GCP's full testimony here.

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  • Next up: GCP Presents Small Business Award to Governor Mike DeWine

    GCP Presents Small Business Award to Governor Mike DeWine

    The Greater Cleveland Partnership (GCP) and its small business division the Council of Smaller Enterprises (COSE) work daily to advocate on behalf of small businesses in Ohio and we depend greatly on public officials to work in partnership with the small business community to promote the wealth and success of a strong economy and infrastructure. When a policymaker performs an act that has a known positive benefit for small businesses, our small business members have historically believed it is important for those officials to be recognized for their support of our cause.  The purpose of recognizing public officials in this manner is to reward elected officials hard work and public service when they provide tools, resources, and incentives that aim to assist small businesses in a meaningful way.

    On May 2, the GCP’s volunteer leaders had an opportunity to meet with Governor Mike DeWine to discuss various, crucial public policy issues that impact Northeast Ohio. The meeting provided John Young (Chair, COSE Board of Directors) the chance to present a Small Business Advocate of the Year Award to the Governor for his leadership. 

    Tim Opsitnick (Chair, COSE Small Business Caucus) serves on Ohio’s CyberOhio Advisory Board and last year our members worked closely with then Attorney General DeWine to craft legislation—the Data Protection Act—that effectively became law in 2018 providing a legal safe harbor to covered entities that implement a specified cybersecurity program. The GCP strongly supported the opportunity for covered entities that implement a specified cybersecurity program because the legislation provides an incentive to encourage businesses to achieve a higher level of cybersecurity through voluntary action. The Data Protection Act encourages more businesses to properly protect their business ventures, their workforce, and those with whom they do business. 

    The former Attorney General and current Governor Mike DeWine was responsible for the strong promotion of the Data Protection Act—via the CyberOhio program—since its inception.

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  • Next up: GCP Questions Timing on Bag Ban

    GCP Questions Timing on Bag Ban

    GCP is supporting an amendment to delay the implementation of the Cuyahoga County Council proposal to ban retailer use of plastic single-use bags.  Last month, Cuyahoga County Council members introduced an ordinance that would ban single-use plastic bags countywide—with specified exclusions. The ban is poised to pass Council later this month with an effective date of October 2019. This action follows an emerging trend in the states of California and New York and municipalities across the country with similar bans. Meanwhile, many states (including Michigan and Indiana) have preempted local authority to regulate these types of containers. An amendment is expected in Council this week that would delay implementation of the ban pending further examination.    

    Cuyahoga County needs to do more work to study the potential impact of this ban, including the environmental and pollution impact. Alternatives to plastic bags may be more harmful to the environment and there needs to be more analysis on whether a ban would reduce pollution, particularly in Lake Erie. Cuyahoga County needs to do more to educate the public and retailers need more time to address the administrative burden of operating under a different regulatory framework in Cuyahoga County and to address the new associated costs on their business.

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  • Next up: GCP's Federal Tax Reform Priorities

    GCP's Federal Tax Reform Priorities

    Leadership in Washington continues to signal that Congress will attempt to tackle the first set of comprehensive tax reforms since the 1980’s. The final results are far from a finished product, but House and Senate Republican leaders recently crafted and unveiled their nine-page tax reform framework, in coordination with the Administration.

    Members of the Greater Cleveland Partnership believe a thoughtful, balanced, and competitive tax environment is critical to the success of our economy and that any reforms made must be all-inclusive and benefit all sectors of the business community.

    Corporate tax reform is essential to growth. And the GCP was encouraged the tax plan aims to cut the corporate rate and lower the top individual rate.

    It is equally important to recognize most small businesses are organized as pass-through entities—they file taxes through the individual income tax code instead of the corporate income tax code.  Therefore, the GCP is optimistic that the proposed tax framework strives to cut the rate for pass-through entities.        

    A tax overhaul and a long-term federal tax plan that results in parity for all business sizes and that incentivizes investment and employment must be realized. Having the tools—such as the New Market Tax Credit—to advance transformational physical development in the City of Cleveland is also crucial. Our membership recognizes the importance of this resource as the GCP has partnered with organizations in the past to secure the successful passage of a five-year extension of the federal New Market Tax Credit program, a financing option that has been instrumental for development in low-income communities.   

    The House Ways & Means Committee has set an ambitious timeline and will aim to mark-up and vote on legislation before Thanksgiving. The GCP will continue to represent our members’ interests throughout the debate and advocate for comprehensive federal tax and entitlement program reform.  

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