Sheila McLaughlin reports:
Butler County and the cash-strapped Lakota Local School District stand to lose a combined $43 million over the next 18 years if West Chester Hospital’s charitable tax status is upheld, officials said.
County commissioners are appealing the case to the Ohio Board of Tax Appeals, saying the county failed to receive a hearing on the matter. School officials are keeping an eye on it.
For the county, it means the difference between future road improvements and traffic backups at Tylersville and Cox roads as the hospital campus there expands. “If it’s ruled against us and there’s no money, there will be no improvements,” Commissioner Don Dixon said.
“Whoever is using it will make the improvement,” he said. “If they need another turn lane into the development, that development is going to pay for it.”
“We are exploring all of our options to protect the school district’s interest,” Lakota spokesman Randy Oppenheimer said.
The 17,300-student district, the second largest in Southwest Ohio, has not seen voters pass a new operating levy since 2005 and saw three school-tax issues rejected at the ballot in the last two years. The district has cut more than $36 million in personnel and programs – including laying off dozens of teachers and eliminating busing for thousands of students – in recent years, and it is anticipated to go back to the voters for a new school tax later this year.
The tax issue involves an 11-year-old agreement between the county and the former owners of the hospital land. In it, the owners promised to pay annually into a tax increment financing account through 2031 instead of paying property taxes on new buildings. For the county, that money was to be earmarked for road and other improvements as the hospital complex grows. Thirty-five percent of the proceeds were pegged for Lakota Local Schools.
Last year, however, Ohio Tax Commissioner Joseph W. Testa granted an application from West Chester Hospital’s former owner, the Health Alliance of Greater Cincinnati, for charitable tax status on the hospital property and backdated it to 2007 when the project was under construction. Testa also ordered the county to refund payments the hospital already made – an estimated $5 million, according to Butler County Auditor Roger Reynolds.
About $1.5 million is money that the county would have to recoup from Lakota since it’s already been paid to the district, he said.
The county argues that the property didn’t qualify for the charitable tax exemption because of the tax increment financing agreement. That agreement applies to future owners if the property was sold, according to documents obtained by The Enquirer.
West Chester Hospital officials say no one from their organization signed any agreement with Butler County. The hospital property has changed hands several times over the past decade and now falls under the umbrella of UC Health.
“This exemption is shared by other not-for-profit hospitals in Ohio. We believe that West Chester Hospital should not be treated differently under the law, as doing so would limit our ability to serve the community,” spokesman Grant Wenzel said.
“Despite a contrary claim by Butler County administrators, we are not aware of any agreement which states that the hospital had agreed to provide contributions to the tax increment financing account.”
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