Monday, January 17, 2011

Why there should be no repeal of Ohio's estate tax or renewal of federal estate tax cut

The following is information I've begun to put together to shed some light on the current efforts to repeal the State of Ohio's estate tax as well as the effort to renew the federal estate tax cuts.

The following information has been posted today as comments for the Plain Dealer's editorial:

by The Plain Dealer Editorial Board | Monday, 1/17/11.

Current Estate Tax for Ohio
Amount over $338,333 but not over $500,000; 
$13,900 plus 6% of the excess over $338,333
Amount over $500,000; $23,600 plus 7% of the excess over $500,000

Rate examples:

Amount                   Tax                   %

 $400,000                17,600               4%

   750,000                41,100               5%

1,000,000                58,600               6%

2,500,000              163,600               7%

3,000,000              198,600               7%

4,000,000              268,600               7%

5,000,000              338,600               7%

For those claiming the estate tax has any impact on the middle class - only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to $100,000.  On the other hand, 91.9% receive nothing (REF: see table below, Kotlikoff & Gokhale, 2000, Federal Reserve Bank of Cleveland).  In ohio, the estate tax only impacted a mere .02% of the number of households – see info below.

The federal state tax rates have decreased and the exemption amounts increased from 2001 to 2009 benefiting less than 1% of Americans. For this past year - 2010 there was a 0% federal estate tax.

The attempt to eliminate inheritance taxes -- which opponents call "death taxes" for their public relations -- would eliminate a huge portion of government revenues (an estimated $1 trillion between 2012 and 2022) for the benefit of the heirs of the mere 0.6% of Americans whose death would lead to the payment of any estate taxes whatsoever (REF: Citizens for Tax Justice, 2010).

In the case of the State of Ohio's estate tax, the repeal of the tax would cut revenue to local governments by more than $230 million annually. The City of Cleveland faces a potential $8 million budget shortfall.

Funds collected from the State of Ohio's estate tax are distributed by law, 36% to the State of Ohio and 64% to the taxing district (City, Township or Village) in which the decedent had resided and/or owned real property.

Here is the breakdown of Cuyahoga County's share of the State of Ohio's Estate Tax for 2008 and the city that receive the most in revenue:

Cuyahoga County Total $30,891,039

Cleveland                  $5,382,386
Cleveland Heights       2,270,082
Beachwood                 2,150,139
Bay Village                 1,717,557
Rocky River                1,585,265
Lyndhurst                   1,244,035
Hunting Valley           1,146,762
Shaker Heights           1,141,723
Euclid                         1,085,719
Parma                         1,055,101
Pepper Pike                1,033,565
Strongsville                1,012,341
Westlake                       808,566

Please also see a very good piece written by Thomas Suddes of the Plain Dealer on 1/8/2011, for some concise arguments regarding the irony of the push to repeal the State's estate tax:

GOP's first target is Ohio's estate tax
; by Thomas Suddes, Saturday, 1/8/11.

Suddes points out the following regarding Ohio's median family income:
"The Census Bureau reports that Ohio's 2009 median family income was about $57,000 -- and the median value of an Ohio owner-occupied housing unit about $135,000."

Remember, the current state estate tax is on the value of an estate greater than $338,333.

And, a review of the number of households and persons the estate tax effects in the State of Ohio shows numbers similar to those reported nationally:

4,445,773 #Households in Ohio 2000 

8,000 # of estates taxed in 2009, or 0.18% 

11,542,645 2009 Population estimate for the State of Ohio

110,000 # of persons effected by estate tax 2009, or 0.01%

In Suddes piece, he highlights the biggest irony as his fourth and most important point –

“…The fourth (and crowning) irony: There's a lot of evidence Ohio's perceived "high tax problem" is caused as much or more by the plague of local taxes (charged by counties, school boards, cities, villages, townships and a swarm of "special districts" and "authorities") than by state taxes payable to Columbus.

Besides federal and state income taxes, and the state sales tax, it's not at all unusual for an Ohioan to pay: 1) property tax; 2) income tax to the city or village where he or she lives; 3) income tax to the city or village where he or she works; 4) income tax to a school district; 5) a piggyback local sales tax; and 6) local "sin taxes" on booze and tobacco…”

by G. William Domhoff, September 2005 (updated December 2010)

Friday, January 14, 2011

Cleveland Medical Mart Groundbreaking

Today was the groundbreaking for the new Cleveland Medical Mart and Convention Center.  Apart from the construction getting underway this month, today’s biggest news is that the project announced that 58 companies and organizations have signed-on to lease space within the Medical Mart and 24 have committed to hold conferences there once the facility opens in the fall of 2013.

Here are some links and information about the project --

Announcement and News Coverage

Official Annoucement, includes

Cleveland medical mart talks up tenants on groundbreaking day
By Jay Miller, 1/14/2011, Cleveland’s Crains Business

Cuyahoga County breaks ground for medical mart and convention center
By Laura Johnston, 1/14/2011, The Plain Dealer

With High Expectations, Medical Mart Breaks Ground in Cleveland
by Dan Bobkoff, 1/14/2011, WBEZ 91.5, Michigan Radio

Cleveland medical mart’s tenants: Big numbers, few big names (so far)
by Brandon Glenn, 1/14/2011, MEDCity News

Cleveland Medical Mart & Convention Center Announces Tenants at Groundbreaking Ceremony
Business Wire, 1/14/2011

Youtube – (12:25 min)
Cleveland Medical Mart and Convention Center Groundbreaking: Chris Kennedy

Flickr photos of todays events.
Cleveland Medical Mart & Convention Center Groundbreaking

Project’s web site:

Live web cam of construction site:

Planned Space:

Medical Mart
235,000 square foot Medical Mart will house permanent showrooms for major medical manufacturers and service providers
Trade Show Facility
230,000 square feet of high-quality exhibit space, featuring high ceilings and industry-standard column spacing
Conference Center
60,000 square feet of high-tech, flexible meeting rooms of varying sizes
30,000 Grand Ballroom offering stunning views of Lake Erie

Project Cost:  $943 million (estimate)
$465 construction costs (current estimates for Mall site)
$375 financing (taxable bond issuance)
$103 operating costs (County to pay MMPI, source of funds not yet identified)
20 year sales tax, increase from 7.5 percent to 7.75 percent.
Sales tax voted on by Cuyahoga County Commissioners in July 2007.

Municipal Bond Offering - COUNTY OF CUYAHOGA - $ 343,350,000
[Posted: Thursday, December 9, 2010]
$20,000,000 Recovery Zone Economic Development Revenue Bonds, Series 2010E (Medical Mart/Convention Center Project) (Federally Taxable - Build America Bonds - Direct Payment) and $200,235,000 Recovery Zone Facility Economic Development Revenue Bonds, Series 2010F (Medical Mart/Convention Center Project) and
$123,115,000 Taxable Economic Development Revenue Bonds, Series 2010G (Medical Mart/Convention Center Project)

Monday, January 10, 2011

I-90 westbound ramp to W. 14th Street will remain closed until approximately 4 p.m. on Tuesday, January 11

     *UPDATED*I-90 Innerbelt Bridge between W. 14th St. and Ontario St., Cleveland - The I-90 westbound ramp to W. 14th Street will remain closed until approximately 4 p.m. on Tuesday, January 11 in order to complete remaining geotechnical exploration for Cleveland’s new westbound Innerbelt Bridge.  
     The Abbey Avenue exit ramp will remain open and motorists will be detoured via Abbey Avenue to W. 14th Street.  On I-90, heavy truck traffic is no longer restricted, however it is suggested that trucks in the eastbound direction remain detoured via I-490 eastbound and I-77 northbound in order to increase traffic flow efficiencies.  Steel repairs on the existing bridge will continue through approximately May 15, 2011.
     **Crews on behalf of the Northeast Ohio Regional Sewer District work to relocate an existing interceptor sewer in Cleveland’s Tremont neighborhood.  BothAbbey Ave. between W. 12th St. and W. 13th St. and W. 11th St. between University Rd. and Abbey Ave. are closed to vehicular traffic until the summer of 2011.  In addition, W. 14th St., just south of Fairfield Ave., is restricted until mid-May 2011.  For more information, please contact NEORSD at 216.881.6600.  Construction of a new westbound bridge is expected to begin in early 2011.  Substantial completion of the new bridge is expected by the fall of 2013, the entire project is expected to be complete by summer 2014.  

Friday, January 7, 2011

Merrick House announces closing of Fulton Road offices – planning for transitioning services to Tremont office and other service providers

Merrick House announced today that they plan on closing their Fulton Road offices and transitioning services to other sites by April 1st, 2011.  Funding cuts over the past four years were cited as the reason for the closing of the Clark Fulton site.  Such cuts reportedly created funding gaps which had to be covered by the organization's reserve funds.  Their decision reflects concerns for ensuring programs at their main office remain solvent.

Plans are being made to transition area seniors to program service locations such at the Westside Community House, Catholic Charities – Hispanic Senior Center, and others in adjacent neighborhoods.

Merrick House – West offices are located on the 2nd floor of Lin Omni Center, 3167 Fulton Road, located in the Clark Fulton neighborhood.  Senior services being provided out of this office include; Congregate Meals, Home Delivered Meals, Transportation provided in the Tremont, Clark/Fulton, Broklyn Centre and part of the Stockyard neighborhoods, Supportive Services (Social Security, Medicare, Medicaid, utilities, housing, and more), Outreach, Counseling, Nursing Services, Licensed Social Worker, Bi-Lingual Staff, Health Screenings, Educational Speakers, Recreational Activities, Computer Lab, Volunteer Opportunities, and more.

Additional services include; the MomsFirst program, Adult Education/GED program, Home Energy Assistance Program (HEAP), and youth/after-school program.

Although our office has been working for several months to assist Merrick House in reviewing their operations and financials, their decision to close the Fulton offices was only shared with us yesterday afternoon.  Staff were notified yesterday and the seniors who receive services were told late this morning.

Merrick House has plans to transfer the MomsFirst program to their main office in Tremont - located at 1050 Starkweather Avenue. They're working to transfer the HEAP program to an agency in the Clark Fulton neighborhood.  Senior services are to be transferred to other agencies.

If the senior services are transferred out of the physical location of the Clark Fulton neighborhood, it will be difficult to have such services returned at a future date.  For this reason, I'll be meeting with Merrick House, Westside Community House and the two primary senior services funders, the Western Reserve Area Agency on Aging and the Cuyahoga County Department of Senior and Adult Services, to review this decision and see if anything can be done to keep services located within our neighborhoods.  In addition, I’ve requested a full review of financial information and other work that Merrick House has done in reviewing alternative options and information that led to their announcement today.

The primary goal is to secure an alternative site and service provider to continue services somewhere convenient to the seniors living in the two-mile radius covering the neighborhoods of Brooklyn Centre, Clark Fulton, Tremont and Stockyards.

Although senior services are available at these other sites, the Fulton Road offices have served as a home for area seniors for more than a decade and the camaraderie and convenience that the physical site has afforded our seniors would be a great loss.

The fact that theses other services are two to three miles outside of our neighborhoods, even with transportation provided, may prove too inconvenient or too bothersome for some seniors in our area to travel to.  It was stated this morning by several seniors upon hearing of the news that some will often walk or use an electric powered wheel chair to come to the Fulton Road site during the summer months.  For these reasons we'll need to do everything possible to either keep core services located within our area or at least some form of community activities or gathering space for our seniors.

In addition, there is a great deal of work to do in assessing social services within the ward and doing all we can to ensure service gaps are filled.  This announcement is an example of why we need to work to increase collaboration and find efficiencies in programming, so that core services such as these will not be reduced or lost to other agencies located outside of our neighborhoods.  We’ll be including other area social service agencies and faith-based organizations in discussions regarding how we may be able to retain these services.

For specific questions regarding the announcement made today, please contact Merrick House directly at 216-771-5077.