
Do communities reap benefits of property tax breaks?
Season 2022 Episode 25 | 26m 46sVideo has Closed Captions
Do tax breaks in exchange for the public good benefit the community served?
Healthcare--and the renowned hospital systems that call Cleveland and Northeast Ohio home make up a significant part of the local economy. Systems such as Cleveland Clinic and University Hospitals operate as non-profits receiving, property tax breaks in exchange for serving the public good. But is the return benefit worth it for the community in lieu of the actual property tax dollars?
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Ideas is a local public television program presented by Ideastream

Do communities reap benefits of property tax breaks?
Season 2022 Episode 25 | 26m 46sVideo has Closed Captions
Healthcare--and the renowned hospital systems that call Cleveland and Northeast Ohio home make up a significant part of the local economy. Systems such as Cleveland Clinic and University Hospitals operate as non-profits receiving, property tax breaks in exchange for serving the public good. But is the return benefit worth it for the community in lieu of the actual property tax dollars?
Problems playing video? | Closed Captioning Feedback
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Learn Moreabout PBS online sponsorship(energetic chimes) - [Mike] The long-awaited US Supreme court opinion, overturning Roe v. Wade, came down Friday morning.
What does it mean for Ohio?
Nonprofit hospitals do a lot of good in the community, but they don't pay a lot in property taxes; should they?
And fireworks will soon be legal to shoot off in Ohio, but a growing number of communities say, "Not in my backyard, or driveway apron, or cul-de-sac."
"Ideas" is next.
(dramatic music) Hello, and welcome to "Ideas", I'm Mike McIntyre, thanks for joining us.
The US Supreme Court decision overturning Roe v. Wade was released Friday morning, just after we finished our Roundtable conversation on the week's news.
So we got Ohio Public Radio and Television News Bureau Chief, Karen Kasler, back on the line, to discuss what the ruling likely means for Ohio.
- Right now, there are six clinics in Ohio that provide surgical and medication abortions, most abortions in Ohio are medication abortions.
It's unclear what the final fate of those clinics will be, because Ohio does not have a total ban on abortion, at this moment.
The state never passed a trigger law, but state lawmakers, led by Republicans who have a super majority, have said they wanna come back and do that, but they wanted to wait until the Dobbs decision came down.
So right now, it's kind of in limbo, in a way.
It's important to note that there is a heartbeat law in Ohio that could potentially be put into place fairly quickly.
And certainly, Governor Mike DeWine, who has long been possibly the most pro-life governor that Ohio has had, the most opposed to abortion governor that Ohio has had.
He and Attorney General, Dave Yost, will advocate for that law, for all the court actions surrounding that law, to end.
And so abortion would be banned for about six weeks going forward, but it's not a total ban on abortion.
And one of the things that's also important to look at in this decision is not just how it affects abortion, but also potentially how it could affect other things, such as same-sex marriage, access to contraception, some of these other things that are also adjacent to the Roe decision.
And obviously these are all gonna be things that are gonna be talked about.
- So Karen, what are the chances that Ohio will completely ban abortion?
- Republicans dominate in the state legislature, and Republicans have routinely signed on to bans on abortion, including the trigger ban that didn't pass.
So right now, Ohio does not have a total ban on abortion.
So it seems very likely that state lawmakers, when they come back in November, and they could come back sooner, but they said they're coming back in November, will pass a total ban on abortion.
- Tune in to 89.7 WKSU, and WVIZ PBS, for continuing coverage of the Dobbs decision, overturning Roe v. Wade.
And listen to "The Sound of Ideas" on 89.7, Monday at 9:00, for comprehensive analysis and discussion.
Now, on to other news of the week, along with Karen Kasler, our panel this week includes Digital Producer, Stephanie Zelinski, from Ideastream Public Media.
And the editor of the "Buckeye Flame", Ken Schneck.
Let's get ready to Roundtable.
Healthcare makes up a significant part of the local economy, hospital systems like the Cleveland Clinic and university hospitals operate as nonprofits, which means they largely don't have to pay property taxes.
Does this mean schools and communities lose out on taxes?
Or do the hospitals employ so many people, and do so much public good, that the break is worth it?
Stephanie did a number-crunching on this, and report on the topic.
And today she makes her debut on the Roundtable to talk about it.
Stephanie, let's roll this back a bit, and talk about how you began reporting on this topic and why.
- Well, I'm a healthcare reporter, and I wanted to understand how healthcare was operating as an industry within the city.
And when you wanna know what a community values, you go straight to the tax dollars.
So I requested a data set from the Cuyahoga County Fiscal Office, and started digging into it to see, you know, who owes what, and what was abated, and what was exempt, and what people were paying taxes on.
- So the hospitals are nonprofits and have been for a very long time, it's the model that's set up; there are a lot of other nonprofits.
The reason we'd focus in on hospital systems is because of their massive size.
I mean, they've been gobbling up land, they do a lot of...
They're the biggest employers in the county, so a little bit different than other nonprofits.
And also, by the way, would get the same tax break.
- Absolutely, I mean, I think, what the people that I spoke to thought, was primarily that it's the change in the economy.
Previously, we were obviously a manufacturing base, but today our economy is dominated by industries that are often nonprofit.
And so county funders are looking at how we pay our expenses.
- What we often hear is...
Listen, the Cleveland Clinic is a world leader, I mean, they get, as I said earlier, they burnish our reputation, they do all kinds of great stuff.
So why are you bothering to talk about this?
Because we obviously know the great work they do, and we're happy to have them here, and they're part of the community fabric.
But it's not an all-or-nothing kind of question, I guess.
- No, it isn't.
And you have to reevaluate your policies whenever there's a large change, an economic change.
And that's certainly true, it certainly happened here.
Tax policy is about what kind of communities we wanna have, what kind of amenities we wanna have, and how that's connected to our community's health.
And so the experts that I spoke to think that it's time to have this conversation about, you know, are these tax breaks doing what they need to do for the community?
And you know, whether or not taxpayers are getting a good deal out of them.
- There wasn't any suggestion in the reporting you did that hospitals should be stripped of their nonprofit status, but you did explore some alternatives in Boston, where there are a number of hospitals and universities.
There's a payment, in lieu of taxes, program, pilot program, where they agree voluntarily to make a payment into the community that would replace some of that, the taxes that are missing.
I remember when I was at the plane dealer reporting on this, about two decades ago with Jim Rokakis, who was a county treasurer then, and pushing that issue.
And it looked like it was something that was going to happen, but it didn't.
- Yeah, it's not clear why it didn't happen, but this is a conversation that we've been having in Cleveland for a very long time.
It happened in the early 2000s, it happened again around 2013, 2014, when the schools were talking about the issue.
I talked to Mayor Jane Campbell, then Mayor Jane Campbell, and she said she wasn't sure, she didn't remember the debate, or what had happened.
But Rokakis said that he thinks that they were talking about payments, voluntary payments of between, you know, like $8 and $12 million.
And so that's a significant amount of money if you're thinking over the past... if you, over the past 17 years, if you think maybe it's $10 million, that's, you know, sizeable dollars that could have gone into county coffers.
- Absolutely right.
Ken, you are a Cleveland resident, you pay property taxes.
I assume, I don't know, you maybe you're abated as well.
- I am not, - Okay.
- I do indeed pay property taxes, IRS, please take note.
Yes.
(Stephanie and Mike laugh) - I don't know if the IRS cares- - No, they don't - about your property taxes.
But when you look at this and you say... and that's the balance, it really is.
You know, I resist the question of, "Why would you even look into this, because the hospitals are great."
And they are great, but this is an issue about whether or not money should be going to the communities.
You look at some of the communities that are in close proximity to these hospitals, they're suffering.
- [Ken] They are.
- Stephanie wrote about that.
- Yeah, they are, and right, it's not just hospitals, it's also churches, and churches take up a lot of land in Cleveland, as well, in Ohio as well, and they don't pay property taxes.
And then you have colleges and universities, and they have that nonprofit status as well.
I was so struck by the reporting on this unbelievable percentage of land that is owned by nonprofits, who are not paying property taxes.
So you can say, "Oh, there's the PR optics."
They're also the literal optics of, "Here is this beautiful, new reflecting pool on the Cleveland Clinic's campus."
And you walk a half a step, right?
We're not talking about, and then you get in your car, and you drive 20 minutes.
No, you can walk to actual blight.
And they're just in such close proximity to each other that it's almost impossible to reconcile just how close these two things are to each other, because they're at such polar ends.
- That fountain was actually a scene in one of your stories, I think it was part two.
- Yes, the reflecting pool, the allee, it... We talked to a bunch of people who live in the neighborhood, and, you know, they have a number of concerns.
And they're coming from it from a historical perspective as well.
The community reminded us that, you know, you can't just talk about a policy on taxes, as if this is something that's just happening now.
This debate happens in context, and in this case, it's a historical context.
That neighborhood where the Cleveland Clinic is founded was historically redlined.
And so, you know, it's suffered from years of disinvestment that has affected the peoples' health who live around the clinic.
And so, you know, there are a lot of people who say, "Well, the clinic gets these benefits for providing charity care.
We're, you know, suffering from heart disease, obesity, kidney disease, pulmonary disease, diabetes, at higher rates than people who live in other areas, because the investment just didn't come to our neighborhood; how is this fair?"
And a lot of those people are also paying more on their homes that they own in Fairfax, than the clinic is paying on some of these glittering buildings worth $100 million.
- And the clinic is in a really tricky spot, because to quantify what they're giving back to the community is really difficult.
And are you talking about the Cleveland community?
Are you talking about the community that immediately surrounds the clinic?
And so for them to be able to answer and say, "Here is exactly what we're doing for our local neighborhood."
I was so struck by the reporting on that, that of course they struggle to articulate that.
- Or are you talking about the research they do, which contributes to the world community, make people healthier.
- [Ken] Exactly.
- Is that part of the contribution?
- Right, people are obviously coming from all over the world.
How that benefits more than the Intercontinental Hotel in that area, right, is more difficult to quantify.
- And I wanted to mention, since you talked about redlining, you dug into that really impressive reporting, and a map that you created, that gives us the history of redlining.
To explain what that is, there were color-coded areas on a map where mortgages could be given, because there was advice that this is a decent neighborhood, and this is a bad one, and this is a horrible one.
- [Stephanie] Right.
- And generally, Black neighborhoods were seen as, "Don't invest there."
- [Stephanie] Yeah.
- And some of the specificity you found, through the history, was really striking.
Like, you know, "Oh, this street's starting to get a little darker," and then whoop, you know, no investment there anymore.
- Yes, absolutely, I mean, the language, when you read the... we have the cards that the Homeowners Loan Association created when banks and different entities were engaged in redlining.
And they talk very specifically about the race of the people who are moving into the communities.
To the point that on some of the cards, if you look on the map, they'll say, you know, "Two Black families now live in this neighborhood," you know, "we're downgrading the rating."
But they're also talking about immigrant communities, Irish communities, Jewish communities.
And so the University of Richmond, who did a lot of the research that I rely on in this section, says that race was really the predominant criteria that they used to rate these different communities.
- Again, this is not the nonprofit's fault, we're just talking about what's happened in these communities.
And then the idea of there not being property taxes that might have improved conditions.
- Absolutely, absolutely, and it is a difficult position for the clinic, because this isn't something that they were, you know, necessarily a part of.
- Karen, one of the things that happens when property taxes aren't collected is that schools get less money.
We've talked about this in the past, in Ohio, about how we fund our schools, and it still is property tax reliant.
- Yeah, and while they've changed, state lawmakers have changed the formula a little bit, and added in the wealth, the household wealth into that formula, it's still... property taxes are a big part of that.
And of course, the question is, while the two-year budget that passed last year did add that household wealth in, will that continue long-term?
Or will it go back to being a property tax-based only system?
And so this is the kind of stuff that's really important.
I mean, when you start thinking of even like House Bill 6, and that was the bill that was supposedly was gonna keep nuclear power plants alive.
If you shut down nuclear power plants, that affects the property taxes in those communities.
All of these things have tentacles, all these things have real impact long-term.
And it's important to think about that too.
- One of the things the clinic did, and I know we reported on that, is they've kicked in tens of millions of dollars into lead abatement in neighborhoods in Cleveland.
So would that be an example of that's kind of like payment in lieu of, it's a contribution to this, what you have talked about, in terms of the national debate, is to make that more codified?
- [Stephanie] Yes.
- Like it's going to be something we do every year, this amount, whatever amount of money.
- Right, well, a lot of the programs are voluntary, like you mentioned, but they set sort of suggested amounts.
So Boston has one of the oldest of these kinds of programs in place.
And I think they, you know, they sort of look at how much they would've paid in property taxes if they were doing it.
And then they set an estimated amount, or a suggested amount.
And then the hospitals, you know, maybe meet that or not.
(dramatic music) - President Biden is calling on Congress to implement a three-month federal gas tax holiday; that would save drivers about 18 cents-per-gallon on regular, and 24 cents-per-gallon on diesel.
He wants states to follow suit, but Ohio isn't eager to suspend its gas tax.
Karen, it's not the first time Governor DeWine has been asked to suspend the state's gas tax.
He's not been receptive in the past.
- Right, in fact, it was one of his first acts, after becoming governor, to increase the state's gas tax, he wanted an 18-cent increase.
The bargaining was done with the Republican legislature that didn't wanna increase it at all, down to 10.5 cents.
I mean, he said that part of the problem was because of a continuing problem over the years, with more fuel efficient cars, and the way that the gas tax has been collected, that there was a real shortage of money to do needed road repairs and infrastructure work, which is what the gas tax funds.
So he's been opposed to pulling back on that gas tax, and the state gas tax is 38.5 cents.
The federal gas tax is 18 cents.
And you've heard President Biden talk about a three-month federal gas tax holiday.
And I spoke with Democratic Sherrod Brown yesterday on a conference call, and he said he is okay with that.
As long as that money goes back into rebates to customers, and not just is pocketed by the oil companies; that's his worry.
But then when it comes to the state gas tax, again, 38.5 cents-per-gallon, that's a pretty big number.
Democratic candidate for governor, Nan Whaley, has argued that if you suspended that through the end of the year, from July until December, you could save people a lot of money.
That money could be back-filled with money from the rainy day fund, which is at $2.7 billion.
But DeWine said yesterday, in answering a question from my "State House News Bureau" colleague, Andy Chow, that that would be a major blow to the ability to continue to fix highways and intersections.
And all that work that he advocated for in raising the gas tax.
- There's a question, too, of how much relief it gives.
When we talk about 18 cents-a-gallon, Ken, I'm not impressed.
When you start talking about adding it together, and it could be close to 50 cents-a-gallon, and I think... And I've got a small car, so when I fill it up, we're getting into the $5 per fill-up, which okay, $5 makes me pay attention.
And somebody who's driving a giant SUV or something, we might be talking about big, big money being saved there, but the relief isn't particularly great, and the cost might be.
- Right, yeah, we're talking about a dent here.
And I think the quote that really struck me was from Democratic Senator candidate, Tim Ryan, who said, "Suspending the gas tax would be a good first step to get working families some relief, but it's not nearly enough."
This idea that we need more systemic, across-the-board approaches and solutions to what's going on right now, because people are just getting hit really hard.
And as you said, this dent is just not it.
- Hmm, and Stephanie, Karen alluded to this, but there's an argument that gas-tax holiday savings don't necessarily get passed on to consumers.
- No, I think there was a study that looked at this out of the University of Wharton, and they determined that depending on which state they looked at, you know, consumers got between like, maybe 70% and 80% of the discount that the lawmakers passed on, through the tax break.
So there's no guarantee that we would get that full 18 cents.
And I think we're looking at... You know, I have friends that are spending now, $400, $500 on gas a week, that's really... - I can't believe that.
- taking a hit.
- I mean, I don't know, it's... people are driving different vehicles than I am, and driving a lot more than I am.
But, you know, I'm sitting there looking at $50-something dollars, and thinking, "That was pretty hefty compared to the $30 it used to be."
- Yeah, I went home last weekend to New Jersey, and I said, "You know what, I'll just drive, 'cause I'll save money instead of flying."
Nope, that didn't work.
- [Mike] No, you paid more.
- Absolutely paid more.
- [Mike] Hmm.
- And can I add one other thing here too, that this is not really necessarily a political issue, but it is a political issue.
- [Mike] Right.
Because you had just, at the beginning of the year in February, 16 of 23 Republicans in the Ohio Senate signed onto a bill to scrap the gas-tax increase, which many of them did not vote for, for five years.
DeWine didn't like it then either.
So you've got both Republicans and Democrats on both sides of this, but certainly there's the suggestion, that if the gas-tax were lowered and people were paying less, then perhaps things that might have an impact on the midterm elections.
And so I think that that's something to consider here.
- And just so we don't get calls, 'cause we were talking really quickly, University of Pennsylvania, Wharton School of Business, not the University of Wharton, just so we- - [Stephanie] Excuse me, yes, that's correct- - No, I get it.
- [Stephanie] I misspoke.
- But you know, that's the kind of thing you get the call on, right?
- Absolutely, thank you.
- So that's cleared up.
(dramatic music) Intel has delayed its ceremonial groundbreaking, planned for next month in Central Ohio, out of protest for slow congressional action on a bill that would provide money for chip-making in the United States.
The company plans to build a massive multi-billion dollar semiconductor manufacturing facility in Licking County.
It looks like, Karen, Intel is rattling Congress's cage a little.
- That's what it sounds like, I mean, Intel put out a statement yesterday saying that because the CHIPS Act is not passed, you know, this ceremonial groundbreaking on July 22nd would be delayed.
Governor's office says, "Hey, the project is not delayed, Intel has reassured us that it's going forward."
And I spoke via text last night with Lieutenant Governor, Jon Husted, who was heavily involved in the Intel project.
And he said he understands the frustration that Intel may have with Congress, but that Intel didn't wanna have the ceremonial groundbreaking without that CHIPS Act.
Because the CHIPS Act is really heavily tied to the expansion of that Intel project, from a $20 billion fab plant, into $100 billion fab plant.
And definitely the largest economic development project in Ohio history.
- The point is though, we don't think, necessarily, that Intel is somehow reneging on its deal, or changing its plans.
It's just saying, "We're not doing the party until you pony up on this CHIP bill."
- And there is also, in the capitol budget that just passed, $1.1 billion in incentives and infrastructure for the Intel project.
Some of that money has a clawback provision, so if Intel doesn't go forward with all the things that it's promised, then that money can get clawed back.
(dramatic music) - A new state law will go into effect next Friday, July 1st, that will allow Ohioans to legally shoot off fireworks on, and around, certain holidays throughout the year.
It's time to go into effect for the July 4th weekend, but in Cleveland, and a number of other cities, setting off fireworks will remain illegal.
It's interesting, Karen, there's this long history in Ohio.
I remember reporting on the Liars Form that they used to have, where you signed a form that said, "I promise to take this out of state within three days."
"Where will you take it?"
"I'll take it to Michigan," where they're also illegal.
(everyone chuckles) But you don't take it to Michigan.
You take it to your driveway apron, you set 'em off on Friday, Saturday, or Sunday, whatever day it is.
And it's really hard for police to do anything about that.
By the time they get there, no one's actually lighting a fuse.
- Right, and I remember the "Liars Form", as it was known, was just so ridiculous, that I could think of people who would write, "Yeah, I'm gonna take it to Alaska, or whatever, why not?"
- [Mike] Or Disneyland.
- Yeah, you're going into your backyard, you're going, "Whatever."
And like you said, at the open of this, this doesn't really change things, in some respects, except that it makes it legal to shoot off fireworks.
And these are the commercial-grade fireworks, the ones that you buy at the big stores that are located outside cities on July 3rd, July 4th, July 5th, and the Friday, Saturday, and Sunday, before and after.
So this goes into effect at a time that a lot of people were potentially doing that anyway, having their own private firework shows, which are not cheap.
I mean, when you start looking at the cost of some of these fireworks, it is really incredible.
I remember going to a firework store a couple years ago, there was one that was like $700.
And I believe it was called "the divorce maker", because if you bring that home, maybe somebody won't be happy.
(chuckles) But yeah, so this is the first time that some of these fireworks will be legal in some communities.
Like you just said, communities still have the option of not allowing these fireworks.
- [Mike] Right.
Stephanie, in most cases, the larger cities, more densely populated communities, they're the ones that are saying, "Let's ban them."
- Yes, I mean, if you've ever stayed up on 4th of July, and listened to the police scanner, you can understand why, you know, communities are frustrated, and police and fire are also frustrated.
You can hear lots of emergency calls going out, people complaining about their neighbors setting off fireworks.
- [Mike] Yep.
- And then you listen to the people who are talking about gunshots going off, and the police are really stretched thin.
- And speaking of gunshots, again on Twitter this week, the Cleveland Division of Police had to remind folks, "Don't shoot a gun up into the air, because what goes up, comes down."
I know some police officers who, at certain times, sometimes on the New Year, as well, will drive under a bridge.
And that's where they're gonna sit for a little while, while they're waiting for the next call, because stuff comes down, so another good point.
Ken, the problem with the city banning this, it's the same as the old law, is policing it.
As I said, it's not like we don't hear fireworks.
How are they gonna track down people?
If they say, "Okay, it's banned in Cleveland," and someone in the driveway apron next to you is setting it off, and no one sees it, I mean, police don't see it; we don't have a case.
- Yeah, so the 4th of July is my least favorite day of the year in Cleveland, I have absolutely no problem saying that.
We have a house on our street there, with Lisa Anne Ryan, Ideastream Public Media Health Reporter.
We have one house on our street that truly takes the entire street hostage.
They are spending so much more than $700, it's easily tens of thousands of dollars, that is not a joke, on commercial-grade fireworks.
And one year, I did lose it, and I called the police.
And I just said, "Look, this is what's happening right now, and both of my cats are now bald."
And the police said, "I just wanna confirm with you, let me just confirm, you are calling us, the police, about fireworks on July 4th?"
And even in that moment, I'm like, "Okay, I'll talk to you later," right?
Like there was... those calls are just coming in constantly.
And how do you elevate one over the other?
Even though, I will say what's going on on our street should be elevated, but yeah, it's really, really difficult.
And if you're ever on any of those neighborhood community Facebook pages, you just watch the debate go back and forth.
And it's pretty heated.
- What's interesting though, is you mentioned communities, and this is an issue.
If you are in your neighborhood, and you call the police, and they say, "You're really calling us about that?"
You can be in some suburban neighborhoods, call the police, and they were there before you finished dialing the last 1.
Because they're like, "Oh, fireworks are going off on our neighborhood?"
So it's applied differently in different places.
- That has not been my experience, that latter story that you just- - [Mike] No, not where you're living, apparently.
- Yeah.
- [Mike] But there are communities where it might be.
(dramatic music) The Ohio State University has won its fight to trademark the word, "the".
Ohio State isn't saying no one can use "the" without its permission, but no one can use the word on athletic branded apparel, because Ohio State was the first one to have that idea, apparently.
The university had been seeking the protections at the 2019, and now settled dispute, with fashion retailer, Mark Jacobs.
Karen, it just sounds silly, on its face, that the word "the" is trademarked by somebody.
But I have a hat that just says T-H-E, and you know it's an Ohio State because of its colors.
This is money.
- Of course it's money, and it's funny, you'll see people who graduated from The Ohio University, who will refer to it as a university that has "the" in the title, but doesn't get all obnoxious about it.
(Mike laughs) But yeah, it's been an issue.
I can recall them trying to do this, and having this battle going back years and years.
And so I guess they finally won, and so it's now The Ohio State University, as it as if it could be confused with all the other Ohio State Universities out there.
- Monday, on "The Sound of Ideas" on 89.7 WKSU, we'll dig more into the decision by the US Supreme court overturning Roe v. Wade.
I'm Mike McIntyre, thank you so much for listening and stay safe.
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