- Limit school district carryover to 40% of their expenses and require excess funds be refunded to taxpayers. An estimated $2.5 billion savings to taxpayers.
- Adjusting the school district 20-mill floor calculation to include emergency, substitute and other levies and income taxes. A Legislative Services report noted school district “property tax collections may be reduced by tens of millions to over a hundred million dollars annually.”
- Giving county budget commissions the authority to “unilaterally” reduce a levy passed by voters if they determine the funding isn’t necessary.
- Eliminate replacement tax levies for all taxing bodies and curtail school districts’ ability to levy fixed sum emergency and substitute emergency levies and school district income tax and fixed-sum property tax levies.
The House will meet on July 21 for a vote to override — they need 60 votes — all but the 40% school district carryover provision. The carryover restriction was the only property tax reform item the House had in its draft of the biennium budget.
Credit: Nick Graham
Credit: Nick Graham
Ashtabula County Rep. David Thomas, who was hand-picked by Republican House leadership to be the architect of property tax reform, told this media outlet the omission is strategic.
“The biggest reason is that would have likely been the one that had the most unsure votes or would have been the hardest to get across the finish line,” he said. “And I remind people our budget commission language actually allows every county to do that.”
DeWine acknowledged property tax reform is crucial but said he vetoed the reforms the legislature proposed because they would have caused significant problems for the schools, “this was not going to be good for our students, ultimately all that matters is our students.”
He addressed a possible override like this.
“We have a constitutional process and in Ohio we have a great system as we do in most states, checks and balances and everybody has a turn to make their move, I made my move,” he said. “My move was to veto things that I thought were not good for the state of Ohio. And the legislature can now do what they do, obviously I think my vetoes were valid but we’ll see what the legislature wants to do.”
The Republican governor axed 67 budget provisions that both chambers of the legislature agreed to during a marathon conference committee led by House Finance Committee Chair Brian Stewart, R-Ashville, and Senate Finance Chair Jerry Cirino, R-Kirtland.
Cirino said the Senate doesn’t have a meeting date yet — the House has to act first — but they will also likely fight the governor’s vetoes.
“I think given the fact we all just got done voting for this bill with the property tax reforms in it, I think it would be a logical conclusion to suggest that we would support any next steps necessary to get it into revised code,” Cirino said.
The property tax issue has been festering for five years and the General Assembly has failed to pass any meaningful relief. The issue turned red-hot in May when a citizen’s group from Cuyahoga County began circulating petitions to a constitutional amendment on the ballot to erase property taxes altogether.
Citizens for Property Tax Reform failed to collect enough signatures —they needed 413,487 valid signatures — for the November ballot but are aiming for next year.
Eliminating property taxes is extreme and many say disastrous because they pay for essential local services. Thomas also took a shot at eliminating some property taxes with House Bill 335. His $3.5 billion overhaul would have erased inside millage among other reforms, including the ones the governor vetoed. The inside millage portion wasn’t included in the budget but he says that doesn’t mean the issue is dead, “inside millage needs to part of the overall strategy.”
“It’s been just over $1 billion every year of increased property taxes just due to inside millage across the state,” Thomas said. “So there should be some recognition there and I think there still is, that that area is something we’ll tackle, what that looks like is still left to be determined.”
He said he believes when they return from summer break in September they’ll pass House Bill 186, which would limit increases in property tax revenues for school districts at the 20-mill floor to the three-year average rate of inflation following a reappraisal or update. Property owners would receive credits for taxes charged over the inflation rate.
In recent years, property values soared by an average 37% in Butler County, 34% in Montgomery County, 30% in Greene County and 27% in Warren County. Locally all but Warren County are currently undergoing the sexennial reappraisal.
It’s still early in the process. Butler County Auditor Nancy Nix said they won’t have hard numbers until next spring, but they are estimating value hikes in the 15% to 25% range.
Cirino agreed they aren’t finished trying to reform the property tax system but they don’t need the study committee — a joint legislative committee on property taxes already worked on the issue last year — the governor is forming to do it.
“People are expecting some tax relief now and this bill does not solve all of the property tax issues,” he said. “The biggest culprit in all of this is inflation which we didn’t start in Ohio. That was a federal issue with reckless spending, deficit spending which resulted in a housing shortage, which resulted in properties valuing higher than they had been in the past. We can’t solve all of those macroeconomic issues but we can certainly help with visibility and much better local control over how properties are being taxed.”
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