The Ohio Supreme Court ruled 5-2 in favor of partial relief for the city of Obetz in its property tax dispute with Franklin County. However, the court also prohibited the county from withholding future payments to make up for previous overpayments. But the Court turned down Obetz’s attempt to recover money that had already been disbursed to other organizations. The Court’s decision means that funds that were taken from Obetz because of an overpayment error related to a TIF agreement and subsequently transferred to recipients, such as the Hamilton Local School District, would stay with those organizations.
The case stems from a tax-increment-finance agreement that Obetz negotiated for a warehouse owned by Goodyear Tire and Rubber Company. The agreement was designed to encourage development by providing tax exemptions. When the county auditor started withholding tax money from Obetz in 2023 to offset purported overpayments, the matter became more heated. Obetz had aimed to stop these withholdings from continuing and recover funds that had already been sent over to Franklin County. Justice Michael P. Donnelly said in a Court News Ohio decision that although Obetz cannot get back money that has already been disbursed, the Supreme Court has prevented further withdrawals, which clearly addresses the city’s complaint.
Obetz’s inability to provide legal justification for the county to return the money was a key factor in the Court’s ruling. In a statement acquired by Court News Ohio, Obetz stated that the county “cites no authority establishing that the county has a clear legal duty to claw back funds that it reallocated,” according to Justice Donnelly. Obetz effectively argued that Franklin County should not be permitted to continue withholding tax payments, a conduct that the Court has now forbidden, notwithstanding this defeat for the city.
There was some opposition to the majority’s position. Melody Stewart, a justice, dissented for clearly procedural reasons. More than anything else, she insisted, Obetz’s real goal was to obtain a prohibitory remedy. According to her, the city might have taken an alternative course, starting with a declaratory decision in the Franklin County Common Pleas Court. The difference between prohibitory and mandatory injunctions—the latter to prevent an action from occurring, the former to reverse an action—was explained by Justice Stewart. To allude to the intricacies and subtleties of the legislation at issue, she stated that Obetz “should seek a declaratory judgment because the county believes it has the legal right under state law to withhold the overpayments and redistribute the money,” according to Court News Ohio.
As it stands, the decision puts an end to one part of a convoluted legal drama concerning tax payments, advancements, and the government’s role in bookkeeping. Obetz has gotten a guarantee that no further money will be withheld in the future to make up for previous mistakes. But it now has to deal with the permanent redistribution of over $400,000 that it once expected to recoup.
Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!
Leave a Reply