Think property taxes are too high? Here’s what Ohio lawmakers are doing about it

Even before Ohioans were hit with historic pandemic-induced property tax hikes, state lawmakers began drafting legislation to fix what’s seen as an out-of-whack system, but so far only two measures have become law over the past 18 months.

Legislators were so concerned about fixing the property tax system they created a Joint Committee on Property Tax Review and Reform in the biennial budget last summer. Senate Ways and Means Committee Chairman Bill Blessing, R-Colerain Twp. and House Ways and Means Committee Chair Bill Roemer, R-Richfield are co-chairs and there are two other Republicans and two Democrats from each chamber.

There have been seven meetings since January and the final hearing is scheduled for today. The co-chairs hope to have a recommendation by June 30, but comprehensive change won’t happen this year, according to Roemer.

“One of the hardest things is a lot of the big reform has to be done in the budget. Because that’s when we can make sure we have the revenue to do it, some of these things are multiple, hundreds of millions of dollars,” Roemer said.

“Unfortunately, Ohio for the last several months has been underrunning in tax receipts, so we’re going to look for smaller items that can be done, given the financial constraints we have now and also look at larger items that can be done in next year’s operating budget.”

According to the Office of Budget and Management revenue report for April, general fund tax receipts for the month were $224.4 million or 8.4% below budget estimates. Total tax and non-tax revenues, excluding federal grants, are $156.7 million below budget year-to-date.

19 proposals

The Dayton Daily News studied all taxation legislation introduced since the start of the 135th General Assembly in January 2023 and found 19 House and Senate bills that touch the topic of property taxation.

The first offering was Senate Bill 43 which was introduced on Jan. 31, 2023 and signed into law by the governor on July 28. It gives surviving spouses of deceased disabled veterans who had applied for but not yet received total disability ratings access to the homestead exemption up to $50,000 of market value. The estimated cost of the benefit to the state was $18,000 because so few people fall into this narrow category.

The second successful bill indexed the homestead exemption to inflation and was folded into the budget bill. House Bill 57 was introduced Feb. 16, 2023 by state representatives Thomas Hall, R-Madison Twp. and Steve Demetriou, R-Bainbridge Twp. The cost to the state this year is estimated at $11 million and $28 million next year.

The majority 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. Only three measures would give across-the-board tax relief in the face of historic property value hikes that were in part pandemic-induced.

Property values spiked an average 37% in Butler County, 34% in Montgomery County and 30% in Greene County last year, which has produced significant increases on tax bills for many.

Butler County effort stalled

House Bill 187 and Senate Bill 153 are twin bills born out of a Butler County task force quickly convened by Commissioner Don Dixon when property value hikes approaching 40% in counties undergoing reappraisals became evident.

The twin bills mandated a three-year, equally weighted average when county auditors value property, instead of just relying on sales from 2022. The equally weighted data produced an estimated average 25% hike for Butler and Montgomery counties, 28% for Clermont and 22% for Greene County and cut tax revenues to local governments and schools by $539 million over three years statewide.

When it traveled to the Senate Ways and Means Committee for concurrence, Blessing made drastic changes to the bill, eliminating the three-year average and inserting an expanded homestead exemption to help seniors.

“Bottom line is anything that’s broad, treating everybody the same without regard to income or property valuation I’d struggle with, and would want to keep it to lower and middle income and seniors,” Blessing told this news outlet previously.

Blessing’s version passed in the Senate Dec. 6, but the revised HB 187 was never called to the floor in the House for a concurrence vote.

“It was changed so drastically that the policy team said we’re not going to vote to not concur on that because literally they took the essence of our 187 out and put in a totally redefined 187 that only spoke to homestead and they had the schools paying for half of it,” Roemer said. “We did not think that was appropriate and I was in 100% agreement.”

Value freeze, ‘70 under 70′

The other holistic measure, introduced on Feb. 7 by Rep. Jean Schmidt, R-Loveland, would temporarily freeze the 2023 property taxes at 2022 levels. Taxpayers already made their first half 2023 tax payments — taxes are paid in arrears — and second half bills will be issued this summer. The bill was referred to the House Ways and Means Committee on April 2.

Typically, the Legislative Services Commission does in-depth analysis of pending bills including the fiscal impact. No analysis has been completed for the bill, but it has a mechanism for refunding overpayments if the freeze were instituted.

Hall has introduced more property tax relief legislation than anyone else with four bills. He and State Rep. Dani Isaacson, D-Cincinnati, introduced their “70 under 70 Plan” or HB 263 last September. In its original form it froze property taxes for residents over age 70 who had lived in their home for 10 years and make $70,000 or less. The home value must be less than $1 million, according to an LSC analysis.

It has morphed during the committee process. Now the age limit is 65, annual income of $50,000 or less is required, the occupancy rule is two years and the home must be valued at $500,000 or less.

The price tag would be $33.9 million next year if it passed but Hall told this news outlet that’s not likely, he is hoping to get something similar in next year’s budget.

“We want to get this done this year at some point, make no mistake about it,” Hall said. “But with the timing and everybody being at each other’s throats in Columbus because of politics it’s a really unpredictable atmosphere to get anything done.”

Hall also has a bill with State Rep. Adam Mathews, R-Lebanon, that passed out of the House Ways and Means Committee May 1 after six hearings by a vote of 11 to 5. House Bill 344 would eliminate replacement property tax levies — which often result in tax increases — but preserve renewals and new levies. The bill also prohibits local governments from filing certain property valuation complaints that would increase property taxes.

‘Circuit breaker’

The most expensive bill to-date would cost the state an estimated $925.3 million in revenue loss annually and was introduced in the Senate by Blessing and Sen. Hearcel Craig, D-Columbus last week.

The bill is modeled after the “circuit breaker” approach recommended by Policy Matters Ohio and gives tax breaks or credits to both homeowners and renters based on the percentage of their income they pay in property taxes.

While the joint property tax reform committee hasn’t been vetting specific bills per se, this bill will likely be discussed today as Policy Matters is on the agenda to give testimony.

Blessing told this media outlet he has no illusions this will pass this year, but he wanted to get it on the table for discussion. He said the price isn’t as out of reach as it might seem and at this point he favors this solution.

“Obviously the first question would be how do you pay for that. Along with Policy Matters Ohio, myself and a number of Democrats and quite a substantial number of Republicans are getting pretty tired of the growing tax expenditure list which is enormous at this point and continues to grow,” Blessing said. “Hacking that away, you can find money for this without having to dip into the GRF (general revenue fund).”

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