Butler County poised to approve $20M tax break for property owners

For part one, the commission intends to rollback about half of the county’s inside millage collection next year for a total tax break of $12.5 million. For the second part, the commission is tossing what some have termed a “political football” that was authorized in the state’s budget by removing some revenue from other taxing entities.

County Administrator Judi Boyko provided the commissioners a report from the county auditor that shows doubling the Homestead benefit would reduce revenues for all taxing bodies by about $7.6 million. For context, she provided another spreadsheet compiled by the auditor with rough estimates — before the actual taxes were collected — showing all taxing bodies collectively would likely receive a $78.3 million “windfall” from the 37% property value explosion in 2023.

“So clearly the increase from a couple years ago far outweighs any decrease from the Homestead exemption,” Boyko said.

The only property tax reform measure in the biennium budget Gov. Mike DeWine didn’t veto, the so-called “piggyback” property tax provision, gives county commissioners the authority to essentially double the state-funded Homestead exemptions and 2.5% owner-occupancy credits for eligible property owners using local dollars.

The commissioners only intend to deploy the doubled Homestead exemption. The 2.5% credit was estimated to give relief to roughly 105,070 homeowners totaling $8.9 million.

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 county is expected to make an announcement on Monday about the tax break.

Commissioner Don Dixon introduced the tax break issue last week saying it’s “obvious” the state isn’t making any moves to help tax burdened homeowners so “we have to do it ourselves.”

Commissioner Cindy Carpenter at the time expressed some reservations about taking funding away from the schools but she said the state hasn’t left them much choice.

“This is not a problem this board can fix,” she said. “So doing what we can do is the best solution here.”

The Journal-News asked Dixon if they consulted with the schools and other governmental entities before settling on this tax reform approach.

“We didn’t enter into those conversations. There’s so many of them, but the facts are the facts and the figures speak for themselves,” he said. “There were huge windfalls in most of those cases, there has to be relief from those taxes somewhere. This is a little bit.”

DeWine vetoed several measures the legislature inserted in the budget because he said he was concerned about adversely impacting the schools. The auditor’s document shows 10 school districts countywide would likely collect a total of $59.3 million from the 37% value hike.

Lakota was listed as the highest recipient at roughly $10.8 million and they stand to lose an estimated $957,753 from doubling the Homestead exemption that benefits about 4,000 needy residents.

School Treasurer Adam Zink told the Journal-News because the district isn’t at the 20-mill floor like eight of the other districts are, they only collected approximately $7.9 million instead of $24.3 million they could have received had they been at the floor.

Ohio law says once a school district’s total current expense millage is reduced to 20 mills, it cannot be reduced any further, so tax revenues grow as property values increase. He said while they appreciate what the commissioners are trying to do, the Homestead measure poses potential problems for them.

“It’s important to note that Lakota did not see that type of windfall because we are not a 20-mill floor district. In fact, Lakota is already deficit spending in the general fund, and this change means a revenue loss of about $957,000 — with roughly $862,000 of that directly impacting our general fund, as the five-year forecast would reflect,“ Zink said. ”Because the commissioners are making this decision one year at a time, it creates uncertainty and makes long-term planning more difficult for schools.”

Commissioner T.C. Rogers was hesitant to take this action last week — noting the commissioners have already rolled back taxes twice before — but he said it is within budget and he is onboard now.

“We’ve already given back just over $25 million so what we now contemplate is to double the piggyback tax on the Homestead side,” he said. “I do realize this would effect the schools and the townships, but it’s only about a 10% less than the increases which they received.”

The commissioners rolled back the county’s entire inside millage in 2022, saving taxpayers roughly $18.5 million. Last year, they waived the $6 million property tax windfall.

Nix sounded the alarm in early 2023 that the mandatory property value update was going to produce historic value hikes and subsequent tax increases. Pandemic-induced inflation and other factors produced the outsized value hikes and revenue “windfalls” and she asked everyone to forgo the revenue boost.

The commissioners, Middletown, Seven Mile and Fairfield, Liberty and West Chester townships answered the Nix challenge and rolled back their increases.

The county will take the biggest hit on the government side of the tax ledger by doubling the Homestead exemption — in addition to the inside millage rollback — at an estimated revenue loss of $991,633. West Chester is next with an anticipated loss of $266,884.

Trustee Mark Welch initially balked at the idea saying if the commissioners want to offer a tax break they should pay for it themselves. He’s okay with it now.

“That’s certainly recoverable by us, certainly we’ll miss it but quite frankly things are getting pretty tight for people and if you are elderly or handicapped or something like that, you can certainly use a little break,” he said. “West Chester I believe will be fine.”

Nix said they are still working through the provisions of the new state law — which her office must implement. They plan to mail applications to eligible homeowners by month’s end.

“I commend the commissioners for putting their money where their mouth is and providing this relief to taxpayers,” Nix said. “This is a win for those in the county least able to afford their tax bills.”