• Mike Burkons

Can Beachwood afford to lower property taxes? Read what some City officials are telling people about

Beachwood Residents,

I wanted to do a quick follow up to my recent post as it received almost twice the number of responses of any other post. This was the post discussing Council's option to vote to lower all property taxes by the September 15th deadline and how it benefits all commercial properties and not just the $500 it would save the average Beachwood homeowner each year.

The following response I received sums it up well, “Not surprised by the silence of politicians (who are notorious orators when it suits them) nor is it surprising that the city feels others (schools) should sacrifice (after passing a levy) but not the city. The levy increased my expenses but I voted for it for the school, not for the school to give up funds for the city. How can the City want the schools to voluntarily take less in property taxes from the Mall property which only benefits the mall but won’t consider your idea not levying these inside mills which benefits the Mall property as well as every commercial property and lowers every homeowner’s property tax bill by almost 6% a year after almost everyone saw a 10% increase?”

The most common question from the replies was asking if any City official responded to me. While none of them responded to me or publicly, it has been relayed to me that two Council members, who were asked in private conversations where they stood on this issue said they were against it because the City wouldn't be able to afford to provide the level of services residents expect without the $2.5m they receive from these inside mills. I am guessing that the reason they won't say this publicly is they know I would point out how ridiculous this position is for the following reasons...

  • Even without any effort by the City to spend more efficiently and responsibly, they are projecting a General Fund Surplus of over $3m for 2019, which by itself would cover the entire forgone $2.5m. On top of that, the City projects to end 2019 with over $28m in General Fund reserves. This is $19m more than the Ohio Auditor’s Office recommends as a healthy General Fund balance of 25% of annual expenditures.

  • On top of that, the following five things are not included in the $3m surplus projected for 2019 or the $28m in reserves the City expects to end the year with;

  1. The $850k a year in new income tax the City will receive from the 400 Cleveland Clinic employees moving to Beachwood from their Lyndhurst campus (The schools see no additional revenue from this).

  2. The $2m to $4m the City expects to receive from the sale of four city properties recently put on the market (The schools see no additional revenue from the sale of these properties).

  3. The additional $900k to $1.2m a year the City will realize in 3-5 years when the economic incentives to Eaton and Omnova expire (The schools see no additional revenue from this).

  4. The $500k to $750k a year in new income tax the City will receive when the second tower at Ahuja hospital is ready to open in 2022 (The schools see no additional revenue from this).

  5. The City will retire two bonds in 2020. As a result, the City's annual cost to service debt will decrease by $1m (The schools see no additional revenue from this).

  6. The $400k to $600k a year in new income tax the City will receive when the new hospital at the corner of Chagrin and Richmond opens and is fully operating (It is unknown if the schools will see additional revenue from this or if the building will be classified as “non-profit”).

  • Out of these 6 things above, only #6 might add revenue to the schools. Despite this, our City officials think the schools should voluntarily give up revenue from property taxes while refusing to even publicly consider or entertain the option they have before the September 15th deadline to vote to do the exact same thing.

How can Council members make the argument that the City will not be able to afford to provide the expected level of services without the $2.5m that comes from these inside mills when even without any effort to spend more responsibly or the 6 things listed above, the $3m surplus projected for 2019 is more than enough to cover the $2.5m the city would forgo by lowering all property taxes? Also, with General Fund reserves $19m higher than the healthy level recommended by the Ohio Auditor’s office, that is enough to pay for the foregone $2.5m a year for 7.5 years by itself, without any surpluses, any of the 6 things listed above, or any effort to spend more responsibly.

We shouldn’t have to pressure elected officials into publicly explaining and defending where they stand on important issues. It certainly isn’t my preferred method but there doesn’t seem to be any other way since our City officials have ignored, dismissed and refused to even acknowledge that they have this option at their disposal since it was first proposed in January when the Letter to the Editor was published.

I will end this email with a direct call to action to our City officials. Please answer the following two questions publicly so the residents can know where you stand on this issue, instead of the preferred method of only discussing this in private conversations.

  1. Will any City official publicly state where they stand on this issue and be willing to engage in public discussion and debate to explain and defend the reasons for their position?

  2. Will any City official publicly explain why they think the schools should voluntarily take less in property taxes from the Mall property which only benefits the mall while refusing to consider the option they have before the September 15th deadline to vote against levying the inside mills on property taxes which not only benefits the Mall property, but every commercial property as well as lowering homeowner’s property tax bill by almost 6%, which would save the average homeowner approximately $500 a year?

I would love to hear your input on my positions, or any issue/opportunity you see. Please reach out via phone (216-832-6771), email (Mike@BurkonsforBeachwood.com) or my Facebook page/blog, etc.

Have a great day and enjoy the summer weather,

Mike Burkons

P.S. If you would like a yard sign in the fall, email me so I can make sure to order enough. I also have a few car bumper magnets left. All public support is greatly appreciated and important. Whether it is a yard sign, bumper magnet for your car, or a Facebook like and/or comment, it sends a clear message that residents want a culture where there is an expectation for City officials to publicly state where they stand on important issues, without having to be pressured and shamed into doing so.

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