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City residents’ taxes subsidize townships, study finds

Townships get bigger share of county money while paying less.

About $11.9 million of the local subsidies comes from Montgomery County. The county gives townships road construction and maintenance money and underwrites costs of police protection, legal representation, misdemeanor-level courts and planning services.

Jim Witmer About $11.9 million of the local subsidies comes from Montgomery County. The county gives townships road construction and maintenance money and underwrites costs of police protection, legal representation, misdemeanor-level courts and planning services.

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By Andrew J. Tobias, Staff Writer Updated 10:47 AM Wednesday, January 25, 2012

People who live in Montgomery County’s townships benefit from $14.9 million in government subsidies for roads, police protection and other services that city residents don’t receive even though both groups pay taxes for them, according to a new study conducted to examine the region’s tax inequities between cities and townships.

The research was conducted by University of Toledo’s Urban Affairs Center and was commissioned by the Greater Dayton Mayors and Managers Association as ammunition in cities lobbying efforts to change Ohio laws.

The inequity helps create lower taxes in townships, because some services there are funded by the state or county.

The inequality also drives businesses and residents out of the cities into townships, the report’s authors concluded.

About $11.9 million of the local subsidies comes from Montgomery County. The county gives townships road construction and maintenance money and underwrites costs of police protection, legal representation, misdemeanor-level courts and planning services. Four-fifths of Montgomery County’s 535,000 residents live in cities and villages who don’t benefit directly from township services but still pay county taxes that help fund them on top of city income taxes. Meanwhile, township residents aren’t charged local income taxes while still benefiting from county services, the study’s authors say.

Other subsidies include the Ohio Department of Transportation giving townships $2.1 million, paid for by state gas taxes, to maintain state routes in unincorporated areas. Cities do not get a similar share for maintaining the same roads that pass through their borders.

“The result is cities are at a disadvantage in retaining business and in economic development because of actions that are very discriminatory against cities,” said Mike Ratcliff, executive director of the Greater Dayton Area Mayors and Managers Association, which financed the $25,000 study.

The UT researchers call for Ohio legislators to change laws to even the playing field. They urge Montgomery County officials to pay to maintain some major roads within city limits while cutting money for maintenance of less-traveled township roads.

Montgomery County Administrator Deborah Feldman was noncommittal Friday about the study’s recommendations. Redefining which roads the county would maintain hasn’t been done for decades and would require extensive legal research first, she said. “We think this is more of an issue for the state legislature.”

The study underscores an ongoing fight between municipalities and proponents of townships.

Matt DeTemple, executive director of the Ohio Township Association, said townships allow residents to pick and choose which services they want. Ohio law requires all cities to provide services once their population hits 5,000 people. The same is not true of townships. “People choose to live in townships because of the quality of life. ... The trade-off is there may be fewer services, but the taxes are lower,” he said.

But the lower taxes are only thanks to taxes and fees paid by residents of Montgomery County’s cities, said Centerville City Manager Greg Horn. He said larger urban townships like Washington and Miami townships should get a special designation more similar to Ohio’s cities. “These townships should have to merge or incorporate, be required to start providing their own services and quit being parasites at the state and county level.”

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