Revenue Sharing Agreement Keeps Businesses From Leaving Communities

Twinsburg officials have decided to renew an agreement between Summit County and its communities in an effort to attract and keep businesses.

City Council voted 6-0 (Ward 1 Councilman Sam Scaffide was absent) to renew an agreement to share tax revenues when companies leave one city for another. The goal is to keep communities from stealing neighboring businesses.

“The purpose is to discourage communities from pillaging other communities and also provides opportunities to recover from the loss of significant income tax decline because of relocation,” said Larry Finch, the director of community planning and development.

Because of the financial hardship losing a business can create, participating communities that use tax incentives to lure businesses away from neighboring areas are required to share the tax revenue with the original municipality.

Twinsburg has participated in the countywide agreement for the past several years.

Communities that participate are rewarded with a five percent increase in points to help them achieve various grants they apply for through the county. However, if they fail to comply with parts of the agreement, communities will lose points.

Companies are allowed to move on their own without any penalty. The agreement only affects communities if they actively pursue companies to move. Participating communities are also allowed to come to a mutual agreement outside of the memorandum without penalty if they choose to, Finch said.

In the past year, Twinsburg has gained a business and lost a business as part of the revenue-sharing program. The American Bottling Company relocated to the city from Akron and one business moved to Macedonia.

Finch believes continuing with the countywide agreement is a good thing.

“I’m comfortable with it,” Finch said. “It’s part of our regional effort to cooperatively work with other communities to benefit the whole area in economic development.”