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Estate tax lobbying effort called illegal; cities disagree

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By Jeremy P. Kelley, Staff Writer Updated 7:49 AM Tuesday, April 5, 2011

OAKWOOD — A Columbus law center claims Oakwood and other cities are breaking Ohio law by participating in a statewide lobbying effort against repeal of the Ohio estate tax.

The 1851 Center for Constitutional Law on Monday sent letters to city officials in Oakwood, Shaker Heights and Loveland, threatening to take legal action against those cities in response to their “ideological effort to maintain the Ohio estate tax.”

Oakwood spent $5,000 to join the Shaker Heights-led Council to Protect Ohio’s Communities. The CPOC, formed to fight immediate repeal of Ohio’s estate tax, states a purpose of “preserving our communities by maintaining revenue sources and amounts that support services ... that benefit citizens.”

“We concede that it is perfectly legal for a local community ... to inform policymakers on how a particular policy change may impact a particular community,” said Maurice Thompson, executive director of the 1851 Center. “However (municipalities cannot) use public funds to advocate for or against a statewide policy that has effects beyond its borders.”

Thompson cites the limited municipal powers stated in Article XVIII of the Ohio Constitution as the basis of his argument. But Oakwood law director Robert Jacques disagreed with that position.

“Lobbying takes place by a number of municipalities for a lot of different reasons,” he said. “There’s been a lot of lobbying that’s gone on at the federal and the state level on the 3C Rail project. And that’s certainly something that affects people outside the borders of the individual communities involved in the lobbying efforts.”

The chief legal counsel for Shaker Heights also said the 1851 Center’s position is off-base.

“It’s utter nonsense,” said Bill Gruber, Shaker Heights’ chief counsel. “They seem to say cities can’t lobby, and that would be a shock to nearly every government in Ohio.”

Twelve people spoke about the Ohio estate tax at Oakwood City Council on Monday, 11 of them in favor of the repeal. Ohio estates with taxable values over $338,333 are subject to the tax. State Rep. Jim Butler, who lives in Oakwood, favors repeal, saying the estate tax hurts Ohio’s competitiveness.

“People are not moving here and not staying,” Butler said. “I think the estate tax is a bad tax. When we only tax one segment of population, it’s a tyranny.”

Oakwood averages $2.6 million in annual estate tax receipts. The city operates at a structural deficit, with cuts or tax hikes averted by estate tax windfalls, like the $9.9 million in 2007.

A bill that would repeal Ohio’s estate tax in 2013 has passed a House committee but not made it to the House floor. A bill introduced in the Ohio Senate would repeal the estate tax immediately.

Contact this reporter at (937) 225-2278 or jkelley@DaytonDailyNews.com

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