Lawmakers changed the tax rollback system last year with House Bill 186, when they increased the 2.5% owner occupied tax rollback to 15.38% over four years by eliminating the 10% nonbusiness tax credit, an estimated $400 million in taxpayer savings annually.
Stephens said his bill is about equitable treatment of all property taxpayers, if the state decides to give rollover relief beyond HB 186. He said a homeowner in the Rock Hill School District in Lawrence County with a $106,700 home receives a $137.50 credit under the new rollback, where someone in the Mariemont School district in Hamilton County’s credit gets $1,356 on their $484,200 home, “almost 10 times as much.”
“A fixed dollar amount method is really the fairest way to assess additional relief above the 15.38% already given,” he said and later added. “I’m sure there will be bills that come forward that will say instead of 15.38% it should be 20%, my point is to say wait a minute, that percentage is going to treat Ohioans differently depending on where they happen to own their house.”
Bill would extend rollbacks
Stephens also introduced House Bill 673 which would apply the rollbacks to all tax levies, regardless of when they were enacted. The state reimburses local governments for the tax breaks. The discounts only apply to levies passed before 2013.
“This policy of crediting only certain levies is problematic for county governments to explain and constituents to understand. By streamlining the policy to provide uniform credits for all levies, regardless of passage date, the property tax system becomes much more understandable while providing real tax relief for property owners,“ Stephens testified.
Stephens told this media outlet a rough cost estimate is $150 million annually. That means in Butler County, for example, an additional 62 levies that have been approved for the various schools, cities, townships and other taxing bodies since 2013 would be eligible for the rollbacks if the measure passed. Taxpayers supporting the other 111 voted levies already benefit from the rollbacks.
Democratic Rep. Dan Troy of Willowick told Stephens “I applaud you for presenting this bill and also your contention that this requires the state to put more skin in the game which really they should do.”
He said the state has a healthy budget now and “I think the rationale behind eliminating this made sense in 2013, it makes sense for us to restore this in 2026.”
Late last year the legislature enacted five measures that will give property taxpayers roughly $3.8 billion in relief over three to four years. The reforms aim to eliminate some types of tax levies, curb unvoted tax increases, give taxpayers tax credits for overly high taxes they have already paid, beef up credits in the future and expand the powers of local budget commissions.
Republican leadership has made it clear while they are not finished reforming Ohio’s property tax system, the next moves won’t include additional state spending. Former Ashtabula County auditor Rep. David Thomas, who was picked by the leadership to shepherd tax reform, reiterated the directive when asked about the new tax rollback bills.
“In terms of property tax reform this year our guardrail is no additional tax money offsetting or subsidizing,” he said. “So changes in policy, less money coming in to local governments but no additional spending.”
Property tax reform is a major talking point for state lawmakers after two groups from Cuyahoga County, Citizens for Property Tax Reform and AxOHTax began circulating petitions last year to put a constitutional amendment eliminating property taxes entirely on the ballot.
Stephens told this news outlet he is aware of his colleagues’ position on further state subsidies but he thinks these measures are worth a discussion because he believes “there’s excess money in the budget” to pay for them.
“This is the time in the (budget) cycle when you have conversations about policies like this or my bills,” he said. “The financial impact is not a lot for the whole budget, so I am hopeful having these discussions now allows us to vet the language and make sure it makes sense and people understand it with the hope it gets into the budget next year.”
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