I-Team: Why millions in local taxes don’t have to be paid

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CUYAHOGA COUNTY, Ohio -- The FOX 8 I-Team has found local leaders not collecting tens of millions of dollars in property taxes even as so many angry homeowners worry about property taxes soaring.

The money not getting collecting is tax money officials have decided doesn't have to be paid.

The I-Team has found an astonishing number of property owners and developers not paying property taxes due to tax abatement, a tax break.

Last year, so many property owners across Cuyahoga County got that break, the total cost topped $94,000,000.

Yet, many homeowners have confronted local leaders lately worried their taxes are going up. Many have received new notices from the county saying the values of their properties have suddenly skyrocketed.

Tremont activist Henry Senyak said, "You have people gaming the system.”

Senyak and others wonder why Cleveland gives property tax breaks for fancy new homes in Ohio City, Tremont and along the lakefront. Is the little guy paying higher taxes to cover the cost?

Senyak said, “It’s at a saturation point. Now it’s impacting the longtime resident with property values spiking beyond control.”

The I-Team asked the City of Cleveland for all properties getting tax breaks and for how much tax money the city is not collecting. We initially got one sheet with just 16 properties and no dollar amounts.

So we went back to City Hall and checked county records too.

We found Cleveland alone is wiping away nearly $7 million with tax abatement, giving twice as many breaks for homes as for business properties.

Cleveland Councilman Kerry McCormack said, “It’s gotta change, right? It’s gotta change.”

He points out cities started tax abatement to spur development in struggling areas.

Every town sets its own rules usually giving tax breaks for ten or fifteen years.

Now, McCormack leads a group working to change the system at least in Cleveland.

He said, “And we’re right now working on reforming it so that its more fair and equitable for people throughout the city of Cleveland.”

Supporters of tax abatement say the program has, in fact, often sparked new development and business. And ultimately, that it has led to more taxes coming in to the government.

However, McCormack’s group is looking at various proposals such as cutting the length of
time for the tax breaks, or giving the breaks to senior citizens, or limiting the breaks for someone building a $600,000 home. The group hopes to have suggestions for reforming the system in the coming months.

Continuing coverage here.

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