Proposed amendment to Ohio Constitution would cap property tax increases



Republican lawmakers have introduced a proposal to amend Ohio’s constitution to limit property tax increases any given year to no more than 4%.

The measure, dubbed “Save Ohio Homes” is unlikely to make the ballot this November because there isn’t time for legislators to vet the issue and get it on the general election ballot by the Aug. 7 deadline.

“If we could it would be so nice to be able to get it on this fall’s ballot, I realize that’s a pipedream,” state Rep. Beth Lear, R-Galena, told this news outlet. “But nevertheless, it is a dream of ours. If it doesn’t happen, we’ll continue to push it through.”

Lear sponsored the measure, recorded as House Joint Resolution 6, along with Rep. Scott Wiggam, R-Wooster. It was introduced on May 15 and sent to the House Ways and Means Committee on May 21.

The Legislative Services Commission estimated the cap could cost $820 million to the various local taxing bodies statewide but “with the passage of time, losses could tend to cumulate, depending on how much taxes would rise in the absence of the limit.”

Ways and Means Chairman Rep. Bill Roemer, R-Richfield said he is glad his colleagues introduced the resolution to get a discussion going, but the measure likely won’t be heard in committee before they recess for the summer, “because of the amount of work that has to go into reviewing this, testimony, we would want to vet it very well and that’s going to make it very difficult.”

Wiggam said making it a constitutional amendment was imperative: “It has to be a constitutional amendment to supersede any other laws that may be governing how property taxes are placed on the ballot and then how they are divvied out.”

Local increases

Historic property value hikes during the triennial reappraisal update last year produced average countywide value increases of 37% in Butler, 34% in Montgomery, and 30% Greene counties.

Properties statewide are reappraised every six years, and property values are updated every third year based on sales data. The shifts are reflected on tax bills the following year.

Value increases don’t automatically trigger tax increases of the same magnitude. A major factor in tax increases is whether school districts are at a statutorily mandated 20-mill floor where they can’t reduce their millage further to adjust for value increases.

Butler County Auditor’s Office Real Estate Director Mike Stein said the two school districts in the county that are above the 20-mill floor had an average tax increase of 6% while the eight districts at the 20-mill floor experienced an average 24% hike.

Mike Brill, the Montgomery County Auditor’s Office communications manager, said the average countywide residential tax increase was 5.8% except in school districts at the 20-mill floor where the average hikes ranged from 8% to 16%.

The pandemic-induced value explosion produced huge, unexpected and unbudgeted revenue windfalls for many schools and local governments and the taxpayers are paying the price.

“It’s almost like ill-gotten gains,” Wiggam said. “Nobody voted for those increases that they received.”

Proposed amendment

The proposed constitutional amendment would work like this, according to sponsors:

It would “use 2023 property tax payments as the base rate for all property taxes and all subsequent property tax increases cannot exceed the prior year’s inflation rate or 4%, whichever rate is lower. This amendment would freeze property taxes at the 2023 rate and then throttle property taxes by not allowing them to increase faster than inflation.”

It allows for the full amount of new levies passed in 2023 and 2024 but thereafter levy increases can’t exceed the 4% cap. Wiggam explained it depends on the amount and how many levies are passed in a jurisdiction in a given year. If one or more levies total 5% for example, they would both be “proportionally rolled back” to the cap level.

In the next year, if the inflation rate is below 4% the new levies can increase up to the total 4% cap.

“This is a yearly small increase instead of those once every three years large increases,” Wiggam said. “So you can catch up, this is not starving anybody, it just means we’re throttling how much you can take at one time, so we don’t have these 24 and 26 and 36% increases in property tax payments.”

Property tax debate

The Dayton Daily News recently studied all taxation legislation introduced since the start of the 135th General Assembly and found 19 House and Senate bills that touch the topic of property tax relief.

Nearly all of the pending bills target those who need financial assistance the most, namely the elderly, low income, and most deal with the homestead exemption and veterans’ families.

Both Lear and Wiggam sit on the Ways and Means Committee, where all bills involving taxation are vetted, so they have heard testimony both pro and con on the measures that have been presented to the committee and had hearings so far.

“We cannot solve the property tax problems by picking and choosing groups of people to provide homestead exemptions,” Lear said. “Because it’s really robbing Peter to pay Paul, you’re not eliminating the tax, you’re just changing who pays for it.”

Only two bills, both related to the homestead exemption, have been enacted and Lear said it’s because leadership in the legislature isn’t taking the matter seriously.

“It does get exasperating when you know that there are things that absolutely need to be done for the sake of Ohioans and those are being put on the back burner, if they’re even being considered. So we just keep trying,” Lear said.

The Joint Committee on Property Tax Review and Reform has also been working since the beginning of the year, but the pair of legislators didn’t formally offer their idea to that group.

“I tend to think that before these committees get together there’s probably already plans on what kind of solutions they can come up with and what kind of solutions they can’t,” Wiggam said. “So we’re taking it to the public at large.”

Roemer co-chairs the joint committee with Sen. Bill Blessing, a Republican from Colerain Twp. and they have said they hope to have their report by the summer recess.

Sen. George Lang, R-West Chester Twp. is on the committee and said he hopes to offer the cap proposal — which he has favored for some time — as part of the joint committee recommendations and will introduce “model legislation” after summer break.

“At least we can have the hearings this year and figure out where all the arrows are coming from, and hopefully expedite in the next (General Assembly),” Lang said. “I’d love it to be a constitutional amendment that would solve a lot of problems.”

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