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City of Westerville Tax Abatements and the Westerville City School District



-                     A Tax Incentive Agreement between the City and the School District was entered into on August 24, 1998.


-                     The agreement was created to ensure that tax abatements had no negative effect on Westerville City School District funding. In actuality, the agreement slightly increases funding to the District when there is a tax abatement.


-                     Currently, there are nine properties with abatements in effect in the Westerville School District (as of Jan. 1, 2003 for tax collection in 2004).


-                     The estimated payment to Westerville City Schools in 2004 will be $47,614.


-                     Had there been no abatements, the School district would have received a net increase of $37,524 due to the projects.


-                     The City is obligated make 33% payments in lieu of taxes for all tax abatements to the Westerville School District. The payments in lieu of taxes are 27% higher than the District would receive had there been no abatement granted.


-                     In some cases, the City will pay a percentage even higher than 33% to the District, such as the St. Anns Office Building recently approved by City Council.


-                     The reason that the 33% payment in lieu of taxes from the City to the District is higher than if no abatement is given is because the State of Ohio reduces its funding to the Schools as new buildings are built in the School District. Abatements keep the new buildings off the rolls, therefore the state does not decrease its funding to the schools. No state reduction, plus the payment by the City to the Schools, causes the project to net more than if no abatement given.


-                     Although tax abatements do not negatively affect the schools, the revenue created by the projects is just a small fraction of the millions of dollars in funding needed to operate the school district.


-                     The City of Westerville will continue to assist the School District with positive office and commercial developments and keep residential developments to a minimum.

Comparison of revenue to Westerville School District generated by development project - Abated VS. No Abatement
Actual Medical office building in the Westar Center of Business
Amount School District would receive if no abatement were granted
Actual Taxes  Less reduction in Add Payment Net Increase
Building cost Valuation WCSD mils WCSD Taxes Rollback  Collected State funding^ Rollback from City to WCSD
4,415,284 1,545,349 35.204663 54,404 5,440 48,963 35,543 5,440 0 18,860
Amount School District will receive with a 12-year 65% tax abatement granted to building owner
Actual Taxes Reduction in  Add  Payment Net Increase
Building Cost Valuation Total mils Total Taxes Rollback Abated State Funding Rollback from City* to WCSD
4,415,284 1,545,349 52.141082 80,576 8,058 72,519 0 0 23,931 23,931
^State of Ohio reduces funding to schools by 23 mils for new construction projects
*City of Westerville makes a 'payment in lieu of taxes' for 33% of ALL abated taxes (school, county, city)

2003 tax abated properties in Westerville School District (taxes collected in 2004)
Difference Between District's Net Increase With Tax Abatement vs. No Tax Abatement
Revenue to WCSD Revenue to WCSD 
Project if no tax abatement with tax abatement Difference %
1. Medical office - Westar $18,860 $23,931 $5,071 27%
2. Office - McCorkle Blvd. 6,674 8,469 1,795 27%
3. Tech co. - N.W. Office 2,990 3,794 804 27%
4. Industrial Bldg. - Westdale 2,179 2,764 585 27%
5. Small office - N.W. Office 1,922 2,439 517 27%
6. Medical office - N.W. Office 1,922 2,439 517 27%
7. 2nd Medical office - N.W. Office 1,666 2,114 448 27%
8. Organization office - N.W. Office 1,076 1,366 290 27%
9. Rehab - Uptown 235 298 63 27%
TOTALS $37,524 $47,614 $10,090 27%

Westerville Voters On Target for Education