Collectively, five counties in southwest Ohio — Butler, Greene, Miami, Montgomery and Warren — could provide $40.4 million in additional Homestead exemptions and $33.6 million for the owner-occupancy tax credit, according to calculations by this news outlet using information obtained from county auditors.
State lawmakers included the so-called “piggyback provision” in the state budget in response to skyrocketing property taxes ever since the pandemic skewed home values and sent them through the roof. Unlike other tax proposals in the budget, this provision was not vetoed by Gov. Mike DeWine.
‘Piggyback’ explained
Former Ashtabula County auditor Rep. David Thomas, who was tagged by House leadership to lead property tax reform efforts, explained the piggyback tax break like this.
“Owner occupancy, you would get a doubling of that and then Homestead you would get a doubling of that. And it’s not that the county is paying for the entire amount, it’s each entity would essentially not receive the revenue from that payment,” Thomas said.
He said counties can pay the whole tab, “If they’d like they can cover it, but it’s essentially the lost revenue for all those different entities.”
The Homestead exemption shields the first $28,000 of a property’s value from taxation and the homeowner must be at least 65 years old or permanently and totally disabled. The income threshold is $40,000.
The owner-occupied tax credit gives property owners a tax break on the property they live in.
Montgomery County
Montgomery County Auditor Karl Keith said if Montgomery County commissioners approved the piggyback tax credits the combined revenue loss would be roughly $32 million. The schools would lose $18.2 million, the county loss would amount to $5 million and $4.7 million for cities, villages and townships.
“Our county is faced with a difficult decision,” Keith said. “The same families who need tax relief are also the ones who rely on the essential local services that could be impacted, like police and fire, human services and public schools. Centerville schools, Dayton Public and Kettering schools would see the greatest loss, and the biggest cut in the county would be to human services.”
Given this novel approach to tax reform is so new, none of the counties have taken action on the tax break.
Montgomery County Commissioner Mary McDonald said the board hasn’t discussed the issue yet but “it is very much worth having the conversation.”
“Because of the times we’re in right now, I see these are the most vulnerable people and I would support having the relief for them,” she said.
But in terms of the county paying the whole tab, “I would have to understand the implications first before I could say and I just am not there yet,” she said.
Butler County
Butler County has the second largest Homestead and 2.5% rollbacks at $16 million combined. The schools — they receive the bulk of property taxes — would take the biggest hit at $10.4 million, the county $2.1 million, the townships total nearly $1.5 million and the remainder going to cities, villages, libraries, parks and vocational schools.
Butler County commissioners have a history of giving tax breaks, rolling back the entire $18.5 million property tax collection in 2022. Last year they waived the estimated $6 million property tax windfall they could have collected as a result of the average 37% property value hike.
County Commissioner Don Dixon said he at least is open to offering the break, but they haven’t debated it yet, “speaking for myself, it’s something I’d look at and consider for sure.”
“The concept of reducing real estate taxes is something I’ve favored for a long time, it’s being able to do it in a fair and equitable way, that’s all I care about, it needs to affect everybody” he said. “I don’t think they really know how it’s going to shake out but we’ll look at it. Look at our record, we’ve forgiven millions of dollars in real estate taxes already.”
Greene County
Greene County Administrator Brandon Huddleson said the commissioners have had “very, very preliminary discussions” on the topic and the “big hesitancy” is that the state isn’t funding it.
“We’re trying to get our mind around what the loss in revenue would be and the percentage of folks that would actually benefit from it and what that benefit looks like,” he said. “So no decisions have been made right now, we’re at the very early stages of considering it.”
The revenue loss in Greene County would be $9.1 million for all of the taxing bodies based on 2023 taxes paid in 2024 and reimbursed by the state for the two tax breaks. Huddleson said this whole idea is troublesome.
“The tough thing for the commissioners is they’re waiving other entities taxes,” he said. “That’s quite the political football that the state handed down to the county commissioners. That adds a whole other aspect to it. So even if they feel like it’s the right thing to do, they want to gauge what that impact to the cities and villages, townships, schools, what does that look like to them. We’re not going to do it in a vacuum.”
Miami, Warren counties
The county administrators in Miami and Warren counties also said no decisions have been made because so many things are still fluid in the property tax reform realm.
“With how new this is, we are still in the process of looking into it and understanding the potential impacts,” Miami County Administrator Michael Clarey said.
With expanded exemptions, nearly $2 million of Miami County’s $4.6 million revenue loss would be from the schools and $10 million out of a total $12.4 million would be the school revenue loss in Warren County.
There is also a grassroots effort afoot to completely eliminate property taxes. The constitutional amendment question could be on a statewide ballot next year.
Rep. Thomas told this news outlet if the local governments don’t start warming to the idea of trying to control their own destiny through things like enhanced budget commission power and the piggyback provision, the alternative will be much worse.
“I’m trying to point locals to the train is coming and if you’re not actually going to do what we need you to do, don’t put up a stink when we try to decrease the tax rate for you because you don’t want to,” he said. “Because the voters will actually take action.”
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