“Right now the Senate is coalescing around the idea of an expanded Homestead exemption,” Blessing said.
If they are successful, it would cover all seniors — not just those below a certain income level — but take income levels into consideration when determining the amount of the benefit.
“It would cover more seniors but also recognizing that somebody with a higher fixed income should get less of a benefit than someone with a lower fixed income,” Blessing said.
Blessing said they are still working out the details of the plan, but previously offered his thought behind proposing it.
“For rising valuations, it is seniors that are the most harmed because they are on fixed incomes, they can’t get a job or wait for their salary to increase, my thought was to look at the Homestead exemption,” he said.
Generally speaking the homestead exemption provides a reduction in property taxes to qualified seniors on the dwelling that is the individual’s principal place of residence. It exempts the value of the property $25,000. The new state budget also indexes the homestead exemption to inflation.
This plan would replace the current bills, twin proposals by Rep. Thomas Hall, R-Madison Twp. and West Chester Twp. Republican Sen. George Lang, that are basically on hold. They proposed HB 187 and SB 153 as a “Band-Aid” measure to “stop the bleeding” in the short term while the legislature works on a more comprehensive solution to perceived flaws in the property taxation system.
Lang said the measure should be ready for Senate approval in the beginning of December, and then it would go to the House for concurrence.
“It’ll be much better for senior citizens, not so much for the rest of us,” Lang said. “It’s a good plan, not as good as my plan, but it’s a good plan and if you look at Issues 1 and 2, you have to look at what can we get passed. If we try to make the plan too good, we’re not going to get it done ... This is going to be great for our senior citizens and our veterans who are impacted the most negatively, and it’s going to put the pressure on us in the next year to come up with a better path forward for everybody.”
Hall said he hasn’t seen the proposal yet, but “whatever it takes to benefit taxpayers, that’s all I care about.”
The House passed HB 187 on Oct. 11 and it has been sitting in the Senate with no committee yet assigned ever since. SB 153 has had four hearings in Blessings’ Ways and Means Committee.
Warren County Auditor Matt Nolan — representing the County Auditor’s Association of Ohio — has testified against the bills throughout the process, calling them a “knee-jerk” reaction.
“That’s a dangerous precedent to make and frankly has no basis in the valuation process that’s done throughout this country. It’s just picking a subjective timeframe and say we’re going to use three years and we’re going to flatten that curve down,” Nolan said during one of the hearings. “That gets very dangerous when we have different markets”
Butler County Auditor Nancy Nix sounded the alarm in March that average property values could skyrocket 24% and by May that number had exploded to 42%, the final median increase now stands at 37% for the county. The pandemic — among other issues — shoved home prices to bloated levels and the state was relying only on 2022 sales. The three-year average approach would bring the average increase to around 25%.
Blessing said this plan should receive considerably less push-back.
“We still need to talk to the auditors but since the valuation process and how things are done remains the same, that was their number one concern and since they pitched the idea of a property tax credit and that is what the Homestead exemption is, we’re basically taking their guidance. I think that they are now on board with something like this,” Blessing said.
“I think the schools probably are too, not that they were vocally opposed before, but it was a relatively large local hit with the three-year valuation average and now it’s not. I think the opposition to this legislation largely goes away with this.”
It is too soon to tell the financial impact of his new plan, but the three-year average — which had a three-year sunset — was estimated to reduce tax collections to local schools and governments by $539 million over the three years.
The auditors have proposed a number of solutions lately, like the state providing either property or income tax breaks and adjusting the school funding formula. The latest idea Nolan said was freezing increases from the large value hikes to the level of inflation for the schools, “it’s lowering to the point where they’re still receiving inflation but not more.”
He said he can’t see the auditors opposing the new idea.
“I don’t think any auditor would oppose that,” Nolan said. “It’s going to make things easier for a lot of people, that’s good.”
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