Tax incentives waste resources and cripple efforts to end child poverty

By Chuck Hoven

     (Plain Press January 2024) The City of Cleveland’s policies are not only not producing growth in population, but they are also driving people out of the city. One resident opposed to an inappropriate development proposed for Lorain Avenue and some residential areas north of Lorain between W. 45th and W. 44th was reportedly told by a City Planning staff member that if they don’t like the development, they should move. Development plans pushed by the City Administration and Cleveland City Council members often ignore current residents’ concerns on how the new development will impact the quality of life in their neighborhood.

NEWS ANALYSIS

     The new developments receive 15-year tax abatements supported Cleveland City Council. Those abatements deprive the Cleveland Metropolitan School District of critically needed property tax revenue. The City of Cleveland itself and other entities such as Cuyahoga County are also deprived of the property tax revenue which results in fewer resources available to meet the needs of current residents.

     Cleveland residents face frustration dealing with a school system that often lacks the resources to address the needs of its schools, parents with children or those planning to have children often leave town in search of schools with resources.

     Cleveland City Council members will soon be faced with a decision as to cut two members from their ranks. The decline in population below the 375,000 mark means the Cleveland City Council will have to reduce its ranks by two members, going from 17 members to 15 members.

     While it would be nice to retain City Council’s most progressive members, recent actions where Cleveland City Council members acted in unison call into question even its most progressive members. The majority of City Council Representatives seem unwilling to challenge City Council’s leadership on issues such as ending the immoral tax abatement program which takes funds intended to go to help children living in poverty get a quality education. City Council members bent to the will of the City Council Leadership and fell in line with calling for a no vote on the Participatory Budgeting Charter Amendment which would have given Clevelanders some say in deciding how to spend 2% of the City of Cleveland’s budget.

     Cleveland City Council is hypocritical in complaining about a loss of their ability to balance their budget because of the proposed 2% People’s Budget. This same City Council regularly makes it impossible for the Cleveland Metropolitan School District to have growth in the property tax revenue portion of its budget while CMSD expenditures continue to rise with inflation. Cleveland City Councils shows no regard for the Board of Education members faced with tough budget cuts because of the tax abatements. The fifteen-year tax abatements mean that a child entering preschool will not see the benefits from the property tax of a new development during their entire education from pre-K to 12th Grade.

     With the school system projecting only a ½% per year growth in property tax revenue over each of the next five years, it is evident that the City of Cleveland over a fifteen-year period is losing nearly as much property value as it is gaining with its new development while forgoing substantial amounts of property taxes for its schools and other programs that benefit its residents.

     In a December 11th Opinion piece in Crain’s Cleveland Business titled “Population growth isn’t the path to change Northeast Ohio needs”, Joanna Ganning, an associate professor of economic development at the Levin School of Urban Affairs at Cleveland State University, argues that improving the quality of life for people already living here should be given priority over attempts to subsidize population growth.

     She says shrinking cities, like Cleveland, should acknowledge population decline in their planning process. The result of not doing this is “decades of wasted spending on projects designed to attract outsiders, who rarely come, and less often stay, especially if the flow of public subsidies stops.”

     Ganning says, “The vast majority of economic development incentives are wasteful, nationally, but the demographic and economic characteristics of Shrinking Cities make their effectiveness especially difficult here.”

     Ganning notes that subsidies given out by cities like Cleveland “can often be directly linked to adverse outcomes for everyday people. Simultaneously, failures to make relatively modest investment in and policies for neighborhoods have caused significant harm.”

     Cleveland is a perfect example of a city where disinvestment in its school system has led to significant harm and — if you believe that education is the path out of poverty – and it results in poverty being passed on from one generation to the next. Cleveland City Council’s majority seems more concerned about the need of developers to make a profit, than they area about helping children in their own wards receive an educational path out of poverty.

     Cleveland City Council Ward fact sheets using data from the United States Census’ 2019 American Community Survey 5-year estimates were compiled by the Center for Community Solutions in collaboration with the Northern Ohio Data & Information Service (NODIS), of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University. Child poverty statistics by ward are among the many points of data contained in the fact sheets.

     In the City of Cleveland, the percentage of children ages 0-17 that are living below the poverty line is 48.2%.

     Below are the poverty numbers from the fact sheets for each Cleveland City Council Ward:

     In Ward 1, represented by Councilperson Joseph Jones, 42.4 percent of the children, or 1,823 children are living below the poverty line.

     In Ward 2, represented by Kevin Bishop, 49.5% of the children, or 2,385 children are living below the poverty line.

     In Ward 3, represented by Kerry McCormack, 57.3%, or 2,178 children are living below the poverty line.

     In Ward 4, represented by Deborah Gray, 39.6% of the children, or 1,453 children, live below the poverty line.

     In Ward 5, represented by Richard Star, 80.4% of the children, or 5,355 children, live below the poverty line.

     In Ward 6, represented by Blaine Griffin, 54.3% of the children, or 1,992 children, live below the poverty line.

     In Ward 7, represented by Stephanie Howse, 56% of the children, or 2,273 children, live below the poverty line.

     In Ward 8, represented by Michael Polensek, 44.9% of the children, or 1,970 children, live below the poverty line.

     In Ward 9, represented by Kevin Conwell, 54.9% of the children, or 2,158 children, live below the poverty line.

     In Ward 10, represented by Anthony Hairston, 49.5% of the children, or 2,301 children, live below the poverty line.

     In Ward 11, represented by Danny Kelly, 41.7% of the children, or 2,793 children, live below the poverty line.

     In Ward 12, represented by Rebecca Maurer, 49.5% of the children, or 2,611 children, live below the poverty line.

     In Ward 13, represented by Kris Harsh, 27.2% of the children, or 1,519 children, live below the poverty line.

     In Ward 14, represented by Jasmin Santana, 50.6% of the children, or 3,386 children, live below the poverty line.

     In Ward 15, represented by Jenny Spencer, 49.7% of the children, or 2,572 children, live below the poverty line.

     In Ward 16, represented by Brain Kazy, 38.8% of children, or 2,175 children, live below the poverty line.

     In Ward 17, represented by Charles Slife, 30.5% of the children, or 1,463 children, live below the poverty line.

2 responses to “Tax incentives waste resources and cripple efforts to end child poverty”

  1. Arthur Hargate Avatar
    Arthur Hargate

    Brilliant. Enough is enough. More truth-telling, please! And broadcast it loudly, far and wide. Cleveland voters must get energized and put real leaders in positions of authority that will put the needs of residents ahead of developers’ profits.

  2. Daryl M Davis Avatar
    Daryl M Davis

    Thank you Chuck! It is interesting to note that Ward 3, where the tax-abated market-rate multi-use developments have been the most egregious is also the holder of one of the highest percentages of child poverty. 57.3% exceeded only by Ward 5’s 80.4%

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