North Canton Participates in a Manipulation of Its Income Tax Policy to Structure a Contrived Donation That Creates Tax Benefits for Akron Children's Hospital.

Prepared Comments Made to

NORTH CANTON CITY COUNCIL

February 12, 2018 

          I would like to speak to Ordinance No. 10-2018, that is on your legislative agenda tonight. The proposed ordinance is titled as an Industrial and Commercial Occupancy grant Agreement by and between the City of North Canton and Children's Hospital Medical Center of Akron. 

          Sadly, the legislation simply makes North Canton City Government a participant in the manipulation of its income tax policy to structure a contrived donation by Akron Children's Hospital that will take advantage of tax laws that benefit Children's Hospital. 

          And these tax benefits that the hospital will gain, with the active participation of North Canton City officials, will come about on the backs of the Hospital's employees through their payment of North Canton City income taxes.

 

          Is this laundering of tax dollars really needed? 

          City officials always defend their corporate charity by saying the particular entity could choose to locate elsewhere. Not likely this time and I will tell you why.  

In a May 2, 2013, Repository story titled, "Stark facilities team up with Akron Children's Hospital," the story reports that "Aultman … had signed a letter of intent for Akron Children's to operate the inpatient pediatric unit at Aultman. 

That was nearly five years ago.  

The 2013 story goes on to say, "For the last five years, Aultman has collaborated with Akron Children's to operate the inpatient pediatric unit at Aultman."  

Akron Children's Hospital and Aultman Hospital have collaborated for ten years at this North Canton location and your argument is that tax incentives are needed to keep Children's Hospital from building elsewhere.  

I think you as members of City Council and the Held Administration should explain yourselves and say why you are playing musical chairs with North Canton income tax receipts. 

So it is your intention to collect income taxes from the employees of Children's Hospital and then return those income tax dollars back to the Hospital.  And out of the goodness of their corporate profit-motivated heart, Children's Hospital will donate $250,000, a portion of the returned income taxes, toward the upgrade of facilities at Dogwood Park.

 

The $250,000 is and was already the City's tax dollars collected from hospital employees. 

And from this contrived donation of income tax dollars, paid by hospital employees, Children's Hospital can realize tax benefits and garner undeserved PR. 

The moving of income tax dollars from Akron Children's Hospital employees, then to the City's coffers, then returning those same collected tax dollars back to Children's Hospital for them to return those tax dollars back to the City under the guise of a donation reminds me of the those stupid shell games at the carnival. 

If one looks up the definition of "Shell Game" on a site called THE FREE DICTIONARY (found at https://idioms.thefreedictionary.com/shell+game) one would find the following:

1.     A game in which an object is place under one of three cups or shells, which are then moved around. The person playing the game must guess the final location of the object. 

The second definition of the game sums up what is taking place with this legislation.  

2.     By extension, a method of deception that involves hiding or obscuring the truth. 

This legislation is nothing but a play on an old confidence trick by pretending to change things or pretending to change things that will afford tax breaks for Akron Children's Hospital. 

Explain the movement of the money to an adult or even a child and both would look at you and wonder if you are either out of your head or an out and out crook. 

I would urge each of you the next time you are up for re-election to tell voters that this legislation was one of your proudest moments. 

When you perpetrated a fraud using City tax dollars. 

That you engaged in needless legislation to provide tax benefits to a corporation on the backs of the employees of that corporation. 

The nearly $1.0 million secret tax abatement for Northridge; the  recent decision of the Water Board foregoing annexation of a property expected to have 75 healthcare jobs, and now manipulating income tax policy for Akron City Hospital does not bode well for the future of North Canton.    

Thank you,

Chuck Osborne