Part III: State agencies policies
Description of the major state agency activities
State agencies in Ohio directly and indirectly affect growth in a variety of ways. They may:
Below are summaries of selected state department activities that have growth-related implications.20 The programs were selected to give a representation of the range of state agency activity in the area of growth and development; not all state-authorized activities have been inventoried, although they may also have similar implications.21
Ohio Department of Agriculture
In 1997, an office of farmland preservation was created within the Ohio Department of Agriculture (ODOA).22 The office is charged with establishing a farmland preservation program to coordinate and assist local farmland preservation programs. It also is to administer a farmland preservation fund, established by the state legislature, consisting of monies received by the office and to be used to leverage or match other farmland preservation funds provided from federal, local, or private sources.
By executive order, Governor George Voinovich directed the office to work with state agencies to formulate an "Ohio Farmland Protection Plan." The plan is to describe the impacts of planned or pending state agency actions that may threaten farmland and what steps state agencies can take to minimize irretrievable farmland conversion.23 A press release from the office of the governor gave a preview of what the new plan, scheduled for release on September 22, 1998, will contain.24 According to the release, state agencies such as the Ohio Department of Transportation (ODOT) (see below) and the Ohio Department of Natural Resources (ODNR), "will work to avoid or minimize farmland conversion as part of their routine funding and permitting decisions that affect land use. The plan also calls for them to take into consideration local comprehensive land use plans."25 The plan will create a coordinating group that includes the agencies with the greatest potential impact on farmland use, including ODOA, ODNR, Ohio Environmental Protection Agency, Ohio Department of Development, ODOT, Water Development Authority, Ohio Public Works Commission, and Power Siting Board.
Farmland preservation can be a tool to direct or shape development patterns by removing certain farmland, particularly on the urbanizing edge of metropolitan areas, from the inventory of lands that could otherwise be developed. This is an emerging function for the ODOA; its success will depend on the extent to which ODOA shows leadership in this area.
The director of agriculture plays a role in determining whether a governmental agency can use eminent domain in agricultural districts under RC 929.01 et seq. An agricultural district is created by the initiative of individual landowners, who can apply to the county auditor to place the land in a district for five years. The land must have been devoted exclusively to agricultural production or devoted to and qualified for payments from a federal land retirement or conservation program for the previous three calendar years. Also, the land must either total not less than ten acres or the activities conducted on the land must have produced an average yearly gross income of at least $2,500 during that three-year period, or the owner has evidence of an anticipated gross income of that amount from those activities. Once placed in a district, such land is taxed at its use rather than its true market value and is exempt from special assessments for sewer, water, or electrical service without the owner's permission. There is also some protection from nuisance suits by nearby property owners stemming from the impact of agricultural uses.
When a state or local government and certain private agencies intend to appropriate more than 10 acres or 10 percent of an individual property in an agricultural district, whichever is greater, or to distribute public funds for the construction of housing, or commercial or industrial facilities to serve nonagricultural districts, the government or agency must notify the ODOA before commencing action. The notice must be accompanied by a report justifying the proposed action and identifying alternatives that would not require the action within an agricultural district. The ODOA reviews the proposed action to determine its effort on agricultural production and on plans, policies, objectives, and programs of other state and local government agencies. If the proposed action will adversely affect the district, the director can notify the government, which can delay the action, and can recommend other alternatives to stem impact on farmland loss to the agency contemplating the action.26
It is not necessary, however, to be placed in an agricultural district to benefit from current agricultural use valuation. Under R.C. 5713.31 et seq., any owner of agricultural land can apply to a county auditor, requesting that the auditor value the land for real property tax purposes at the current value such land has for agricultural use. When all or a portion of land is converted to nonagricultural use, the county auditor levies a charge on such land equal to the amount of tax savings during the three tax years immediately preceding the year in which the conversion occurs. The county auditor then values such land under rules promulgated by the state tax commission. Land valued in such a way does not have the protection that land in agricultural districts has.
Ohio Department of Development
By statute, the Ohio Department of Development (ODOD) is the state planning agency, with the authority under R.C. 122.06(B), to prepare "comprehensive plans and recommendations for promotion of more desirable patterns of growth and development of the resources of the state."
A number of ODOD efforts have locational impacts on housing. For example, through the Ohio Housing Finance Agency (OHFA), the state allocates housing credits for projects on a statewide basis for acquisition, substantial rehabilitation, new construction, and single room occupancy. The credits are used to offset an individual corporation's federal income tax liability. The allocations appear in a "qualified allocation plan" prepared by OHFA. The plan gives preference to housing projects that are located in qualified census tracts (as defined by the U.S. Department of Housing and Urban Development, HUD) as well as low-income counties (concentrated in the southeast portion of the state) and counties that have been declared federal disaster areas.27
OHFA also administers the state's first-time homebuyer program that provides low-interest loans to qualified applicants to purchase new homes. The criteria for home selection can determine where such a home may be located. The maximum size of a tract on which such a home may be located is two acres but could be larger depending on health requirements for septic tanks. Consequently, this criterion allows the purchase of homes in rural areas as well as those receiving urban services.28
Via its Office of Housing and Community Partnerships, ODOD administers the Small Cities Community Development Block Grant (CDBG) program for smaller municipalities and counties in the state. That program provides monies to local governments for community development projects that satisfy federal requirements to eliminate slums and blight and to benefit low- and moderate-income persons.
While CDBG projects are typically constructed in neighborhoods or areas where there are existing concentrations of low- and moderate-income persons, they can include new areas as well. For example, CDBG funds can be used to extend water and sewer lines to a new housing project that is occupied in whole or in part by low- and moderate-income families. CDBG monies can also be used to provide grants and loans to new business start-ups and expansions that benefit low- and moderate-income individuals.
The ODOD also oversees a large portfolio of state economic development programs that have locational criteria. An example is the urban or rural jobs and enterprise program. RC 5709.61 to RC 5708.67 authorize the creation of such zones by county and municipal authorities. County zones may include municipalities as well as unincorporated areas, but their establishment requires the consent of the affected legislative body or board of township trustees. The legislation is intended to retain existing jobs or create new employment opportunities for the state as a whole. It is not intended to result in the transfer of employment from one political subdivision in Ohio to another, although relocation of jobs within the state is permitted under certain circumstances.
Under this legislation, a county or municipality can designate such zones by petitioning and obtaining the approval of the ODOD director, who must review such petitions to determine whether they satisfy statutory criteria. A central city in a metropolitan statistical area may designate one or more areas as enterprise zones without county involvement. For example, the Cleveland enterprise zone covers the entire city of Cleveland. If a municipal corporation is not a central city in an MSA, county board approval of the enterprise zone is required.
Enterprises that locate in such zones enter into agreements with the county or municipal corporation, which can offer incentives that include exemptions from taxes on tangible personal property used in the business at the project site and for real property constituting the project site. In addition, the enterprise zone statute provides for state corporate franchise tax incentives by the state on new investment when the enterprise reimburses new employees for job training. The ODOD director, along with the state tax commissioner and director of human services, administers the enterprise zone program; the ODOD director annually reports to the General Assembly on the program's costs and benefits.
Cleveland State University's Urban Center, in the Levin College of Urban Affairs, completed an in-depth evaluationthe first of its typeof the enterprise zone program in 1998 for an economic development advisory committee headed by State Sen. Charles Horn. It found that the program had "a marginally positive impact on the State of Ohio's Treasury and the tax bases of Ohio communities using the enterprise zone."29 It also found that the program was "reasonably well administered and run at the state level."30 However, the evaluation observed that the program "currently lacks an adequate guiding policy vision and management goals to understand in a complete sense the costs, benefits, and other impacts of the program." 31 This study noted that communities using the program needed to explicitly identify how their zone is guided by overall community economic development goals within an appropriate surrounding regional context.32
One of the Cleveland State recommendations proposed that locational criteria for zone designation be revised to allow distinctions to be made between communities that were experiencing distress and those that were already benefiting from business start-ups and expansions. Under the proposals, "disadvantaged communities" would be permitted to offer the greatest amount of benefits to firms locating within zones. In contrast, a community that was experiencing rapid growth would be authorized to offer the least amount of benefits to firms. The study recommended that an analysis of Ohio communities be conducted to establish more specific parameters in defining how communities would be classified into different zone types. Enterprise zone designations would be limited to municipal governments, in contrast with current practice.33
Within the ODOD for administrative purposes is the Ohio Water and Sewer Commission. The commission can advance monies to counties and municipalities as well as other public entities to cover that portion of the cost of water and sewer line extensions to be financed by assessments that are statutorily deferred or exempt (for example, water line assessments that cross agricultural property). The seven-member commission is composed of the director of development or the director's representative, the director of health or the director's representative, the director of agriculture or the director's representative, the director of natural resources or the director's representative, and three members appointed by the governor.34 Funding for the commission's activities comes from the sale of state infrastructure bonds and interest as well as monies that are recouped through repayment of deferred assessments. The criteria governing the Commission's granting of such advances do not actually appear in the Revised Code, but in the Ohio Administrative Code.35
Ohio Environmental Protection Agency
The impact of the Ohio Environmental Protection Agency (OEPA) on growth stems from its planning and regulatory authority over water and wastewater. OEPA reviews all plans for the construction or expansion of water supply and treatment facilities and wastewater treatment plants. The agency also reviews engineering plans for the design of water distribution systems and wastewater collection systems, such as those for residential subdivisions, and must approve them prior to their installation.36 OEPA approval is separate from any local review. These approvals are critical because they determine where development can occur. OEPA regulates emissions through air quality permits and discharges into receiving streams and water bodies through water quality permits.
The OEPA director has authority over the approval of solid waste management plans that provide a framework for the location of landfills and other facilities. In addition, all solid waste and infectious waste facility operators must apply for and receive a permit or license from the OEPA or the local board of health to establish or operate the facility. A hazardous waste facilities board (composed of the OEPA director, the director of the Department of Natural Resources, the director of the Ohio Water Development authority, and a chemical engineer and a geologist, both of whom must be employed by the state) has sole authority to approve permits for hazardous waste facilities. State approval for such facilities preempts local approvals.
In the mid-1990s, OEPA, working with 100 volunteers from around the state, undertook a comparative risk project. The project's goals included "gathering the best available quantitative and qualitative data about environmental issues, ranking environmental risks, and prioritizing recommendations to reduce risks."37 The final report in 1997 included a series of recommendations to maximize overall reductions in risk to human health, ecosystems, and quality of life.
Among the project's recommendations, as yet not implemented, were the following:
Ohio Department of Natural Resources
The Ohio Department of Natural Resources (ODNR) has influence over land use in the state through its planning and regulatory activities in the Lake Erie coastal area as well as its supervisory jurisdiction over floodplain regulation enacted by counties and municipalities. It also maintains sophisticated computer-based information systems on land-use, soils, geology, and land use capability that are used by state and local government and the private sector.
Under the authority granted to it by R.C. Chapter 1506, ODNR is the lead agency for the development of a coastal management program for Lake Erie, administered by the Division of Real Estate and Land Management (REALM). The planning program is intended to preserve, protect, develop, restore, and enhance the resources of the Lake Erie coastal area. Stimulus for this program was the Federal Coastal Zone Management Act of 1972 managed by the National Oceanic and Atmospheric Administration (NOAA) of the U.S. Department of Commerce. That act and subsequent amendments authorize federal financial assistance to coastal states for the development of such management programs. The act requires that federal actions be consistent with approved coastal management programs. ODNR completed a federally-approved plan in 1997. The document details the extent of the coastal areas through a narrative boundary description and scaled county maps, and sets forth state policies for resource management along the Lake Erie coast.41
Under the coastal management program, ODNR may provide grants awarded from federal and other funds to counties, townships, and municipalities to pay for the adoption, administration, and enforcement of zoning ordinances and resolutions relating to coastal flood hazard areas or coastal erosion areas, among other purposes. RC 1506.04 requires the ODNR director to compel counties and municipalities in a coastal flood hazard area, should they fail to participate or remain in compliance, to adopt resolutions or ordinances that meet or exceed the standards required for participation in the national flood insurance program. RC 1506.06 gives the director the authority to identify coastal erosion areas around Lake Erie and to notify affected local governments and landowners in such areas.
RC 1506.07 authorizes the director to regulate the construction of permanent structures in the coastal erosion areas in the absence of locally adopted zoning or building regulations that have been approved by ODNR as meeting its standards. The intention of the statute is to provide for a more stable shore as well as to lessen erosion along Lake Erie. The law effectively gives ODNR land-use regulatory authority over portions of the Lake Erie coast. ODNR's Division of Geological Survey has mapped coastal erosion areas that are the subject of regulatory protection. As of June 1998, ODNR requires a permit for construction of any new permanent structure in a coastal erosion area, regardless of whether the property is publicly or privately owned. However, no state permit is required where a county or municipality is enforcing a permit system that meets standards required by law. Some 2,200 properties are covered by the coastal erosion program.
Projects or activities in the coastal area that are proposed by a state agency or are subject to state approval must be consistent with the coastal management program document, as determined by the ODNR director. However, any state agency may develop and adopt a statement of coastal management policies. If the ODNR director approves those policies and if the project or activity is in accordance with that statement, a determination is not required.
ODNR's Division of Water supervises the floodplain management program in the state, including review of local floodplain regulations for compliance with federal standards.42 The division serves as a clearinghouse for floodplain maps within Ohio and makes available model floodplain regulations. Once a county or a municipality has adopted floodplain regulations, it must forward the regulations to the Division of Water for review. Once the division finds that the regulation meets federal standards, it forwards the regulation to the Federal Emergency Management Agency (FEMA), which oversees the federal Flood Insurance Program, for approval. The division can also cite a county or municipality for failing to properly enforce or administer an adopted floodplain regulation and can advise FEMA of the local government's noncompliance.
Through REALM, ODNR provides services to the state in the area of geographic information systems for land-use planning, agricultural use, development reviews, and the coastal zone program. A key land-use tool developed by ODNR is its Ohio Capability Analysis program that allows the computer generation of composite maps of land-use inventories and land capability analysis maps. The capability maps evaluate the ability of land to support or sustain different land uses for planning and regulatory purposes by governmental units and the private sector.
Also within ODNR is a Division of Mines and Reclamation that issues permits for the siting of surface mining operations. Such permits have land use impacts that must be reconciled with regional or local plans. Indeed, one state administrative appeals body has ruled in a case that involved farmland preservation. In a recent decision that overturned a permit issued by the division, the State Reclamation Commission held that the division must consult a comprehensive plan when it is considering issuing a permit.43 In this case, the Clinton County Comprehensive Plan, prepared pursuant to Chapter 713 of the Revised Code by the Clinton County Regional Planning Commission and adopted in 1995 by the board of county commissioners, had designated the area where a proposed mine was to be located as an "Agricultural Protection Area" characterized by soils that were highly productive and uniquely suited to agricultural use. The Reclamation Commission found there was a conflict between the county's comprehensive plan and the proposed future use of the area sought to be mined.
Ohio Public Works Commission
RC Chapter 164 created a statewide infrastructure financing program after Ohio voters approved constitutional amendments in 1987 and again in 1995 to authorize it. The program is administered by the seven-member Ohio Public Works Commission (OPWC) and the eleven-member Ohio Small Governments Capital Improvement Commission (OSGIC). It provides monies for grants, loans, debt support, and credit enhancements to local government. Eligible costs include roads and bridges, wastewater treatment systems, water supply systems, solid waste disposal facilities, flood control systems, stormwater and sanitary collection, storage, and treatment facilities.
The statute established 19 district public works integrating committees that include from one to 11 counties. These committees rank projects submitted from local governments within allocations established by the state and submit them to OPWC. Separate district subcommittees prioritize projects from townships and villages with populations under 5,000 to submit to OSGIC.
The structure of the program, including requirements for local matching funds, places high priority on projects that involve repair and replacement of existing infrastructure rather than new and expanded facilities. For example, the statute requires that a local government must put up 10 percent of the estimated cost of repair and replacement projects and 50 percent of the total cost for new and expanded infrastructure. In addition, projects that can be funded by user fees, such as those for water and sewer, tend to receive authorization for loans rather than grants. Statutory criteria for projects "tend to ensure that the district integrating committee selects projects which have a greater-than-local impact, have significant local match, have other funds committed [such as those from the state or federal government], and are ready to go to construction."44
Again, this is a program, also well-administered, that has implications for growth and development through authorization of projects that could, for example, expand highway, water, or sewer capacity or affect the state's natural resources. Recent OPWC policies recognize this to some degree. For example, a May 1998 advisory document states that OPWC, as part of its review of "new and expansion" projects, will evaluate whether the project will have a significant impact on productive farmland.45 If it does, OPWC may deny the project. Another advisory addresses compliance with state flood damage reduction standards prior to approval by the OPWC.46
Ohio Department of Transportation
The Ohio Department of Transportation (ODOT), pursuant to RC 5501.03(A)(2), coordinates and develops, in cooperation with local, regional, state, and federal planning agencies, "comprehensive and balanced state policy and planning to meet present and future needs for adequate transportation facilities." ODOT also serves as the administrator for federal department of transportation grants for planning and the construction of highway and mass transportation facilities.
ODOT's current plan for the state's transportation system is Access Ohio.47 The plan is organized around five goals that address system preservation and management, economic development and quality of life, a cooperative planning process and transportation efficiency, transportation safety, and funding. The plan proposes a variety of initiatives in the areas of highways, bikeways/pedestrian activities, rail, air, transit, and water.
In particular, Access Ohio highway proposals contemplate a series of "macro-corridors" connecting 76 of Ohio's 88 counties--and these obviously have the greatest implications for growth and development in the state. The macro-corridors include widening 299 miles (including 250 bridges) of the rural interstate system "to ensure that increasing traffic will not reduce the level of service."48 For example, the plan calls for widening 88.6 miles (including 160 bridges) of the east-west highway, I-70, across the center of the state. Some 37.7 miles of I-75 (including improving 34 bridges) from Miami County to the Cincinnati area are proposed for widening. Some 13 miles of Interstate 90 east of Cleveland will require widening (including improvements to 14 bridges). Segments of I-71 adjacent to the Cincinnati and Columbus areas, totaling 88.6 miles (including 150 bridges), are also proposed for widening. Access Ohio comments that "[m]uch of the highway between Cincinnati and Columbus is adequate if traffic increases at the same rate it has in past years. However, a major new generator of traffic in the southwestern part of the state could trigger new growth and may require additional improvements in the decades ahead. " (emphasis supplied)49 This implies that a single or series of local government land-use decisions can force change in the state plan, at least as the decisions affect this transportation corridor.
The plan includes improvements to rural arterial highways as well: U.S. 30 across the entire state, U.S. 24 from the Indiana border to Toledo, U.S. 23 and S.R. 2, and portions of U.S. 50, S.R. 161, S.4. 71, U.S. 33. The plan also projects a possible high-speed rail line on 260 miles of track connecting Cleveland, Mansfield, Columbus, Springfield, Dayton, and Cincinnati. The Ohio High Speed Rail Authority, which is the state lead agency in passenger rail, commissioned a study that anticipated a capital cost for this effort of $3.1 billion.
Access Ohio also includes summaries of the regional transportation plans for the 16 urbanized areas in the state that have metropolitan planning organizations (MPOs). The details of transportation planning (including mass transit) within the state's urbanized areas are the responsibility of these MPOs, rather than ODOT.50 However, the state and regional transportation plans obviously must be coordinated, and the state has considerable influence over the contents of these plans through participation in the metropolitan transportation planning process.
In large measure, although the plan does not generally acknowledge it, Access Ohio will have land-use impacts. For example, it is clear from reading the plan (including its system of prioritizing corridors and hubs) that it contemplates a continual corridor of urbanization between Miami County, north of Dayton, to Cincinnati, along I-75. The plan also recognizes the possibility of a urbanized corridor between Columbus and Cincinnati along I-71; it anticipates a major new passenger air facility in the southwest portion of Ohio, "possibly within the triangle of Columbus, Dayton, and Cincinnati"51 and in fact shows this new airport facility southwest of Columbus in Clinton County on one of the plan's maps.52 This new facility would be necessary, according to the plan, to accommodate a new generation of "hypersonic" aircraft that fly faster than the speed of sound and would make international flights into Ohio. Less apparent are improvements to U.S. 30 and the consequent potential for urbanization of portions of a corridor along the northern quarter of the state extending from Indiana to Pennsylvania (including the area from Cleveland to Toledo). U.S. 35, which cuts across the southwest and south central portion of Ohio, is another candidate for additional urbanization.
ODOT has the ability to implement Access Ohio through the formulation of a transportation improvement program that lists federally backed transportation improvements for the areas outside of MPO jurisdiction. MPOs themselves prepare similar documents for their urbanized areas that establish immediate funding priorities. ODOT maintains a system to prioritize and select new road projects. The system places high priority (60 percent of the total base score) on average daily traffic, traffic volume, and completion of the "macro-corridors," but also takes into account economic development, regional multimodal transportation, and traffic accident factors.53 A newly-created Transportation Review Advisory Committee (TRAC) is reviewing the ranking system and can hear appeals from any local government that believes its project did not receive a high enough ranking.
Apart from programming and serving as the advocate for transportation projects, ODOT also reviews engineering designs, such as those for interchanges and bridges, and approves land access to roads under state jurisdiction, among other duties. These responsibilities give ODOT authority over the degree and type of access that property will have to state roads and, therefore, some control over the type and intensity of development that will occur.
Access Ohio also documented the relatively limited role of the state in the area of public transit and proposed heightened support through dedicated funding options that are "politically feasible." According to the plan, there are 56 public transit systems in Ohio that serve villages, cities, and unincorporated areas in 48 of the state's 88 counties. Twenty-four systems serve urban areas and 32 serve rural communities and counties. Thus, public transit is only an option in 54 percent of the state's counties. Recent expenditures for all 56 of the systems totaled about $430 million annually, supporting both annual operating and capital costs. ODOT has provided about $30 million a year of this total, with the remainder coming from the federal government, local government funds, and user fees.
The state transportation plan noted the prohibition in the Ohio constitution on the use of gasoline and motor vehicle license taxes for programs other than road and highway projects. There is no law, however, that would prohibit Ohio from creating a dedicated tax for transit assistance and the plan proposed three options: (1) a motor vehicle rental fee; (2) a motor vehicle lease-purchase fee; and (3) an annual excise fee on parking spaces. The plan calculated the amount of money that could be expected from each; the annual excise fee on parking lot spaces yielded the most, $187.3 million and all three together could generate between $216.7 and $252.2 million per year. The plan did not propose changing the state constitution, however, although that is always an option. The plan concluded that Ohio needs to develop a dedicated source of funding for mass transit in order to create and truly balanced multi-modal transportation system. Based on a survey conducted for ODOT by the University of Cincinnati's Insitute for Policy Research, the plan asserted that Ohio residents appeared to support a well-chosen source of funding.54 (See transportation reform agenda from the Greater Cleveland Growth Association.)
Ohio Water Development Authority
R.C. 6121.01 et seq. authorizes the establishment of a state water development authority with the power to make loans and grants to governmental agencies for the acquisition or construction of water development projects by any such governmental agency. These include both wastewater and water management projects. These projects are funded through water revenue bonds and issued for such purposes. The authority is composed of eight members as follows: five members appointed by the governor, and the directors of natural resources, environmental protection, and development, who serve in an ex-officio capacity.
Smart Growth Working Paper
All public policy makers should acknowledge the clear nexus between new state-assisted investment in one place and the resulting disinvestment or stagnation nearby in older areas. A cause-and-effect relationship exists and cannot be ignored. The argument can be easily made that the State has an obligation to avoid doing harm when it assists in development and, if harm is caused, the State should provide a remedy.