During a meeting last week, they set some new guidelines for establishing a “circuit breaker” program for property taxes and an enhanced Homestead exemption to provide targeted relief for the neediest Ohioans.
“The one thing we want to take into consideration is income and the relative ability to pay for increased property taxes,” Hamilton County Commissioner Denise Driehaus told her fellow committee members. “I’m keen on this idea, it’s all a matter of degree.”
The circuit breaker idea — which is in place in 30 other states — gives tax breaks or credits to both homeowners and sometimes renters based on the percentage of their income they pay in property taxes. It was introduced in a Senate bill last year and received two hearings. A similar House bill received one hearing. There are circuit breaker bills in each chamber now — one introduced in January and the other on June 17 — and neither have had hearings.
Under the House version, the state would lose out on $894.8 million in income tax collections in the first year and the Senate bill would cost the state approximately $819.6 million.
Former state legislator and co-chair of the group Bill Seitz suggested a version with an estimated $525 million price tag. Homeowners age 67-plus or fully disabled earning less than $150,000 would get a $1,000 credit — on a single acre of land — if their property taxes exceed 6% of their income.
He said this proposal is more restrictive — and thus cheaper — than other states but even so he doesn’t think it’ll fly.
“I think we could all agree while 30 states have figured this out, I don’t see any way that we could model a circuit breaker that would have a $525 million a year appropriation affixed to it in this General Assembly,” he said. “I just don’t know if we cut the income threshold down we might have something to talk about.”
Change in Homestead exemption
The general 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. There are some higher limits in the expanded Homestead categories for people like veterans.
“It needs to go up some. People who qualify for the current Homestead have to make less than $50,000 a year which in Warren County is like 12 homeowners,” Warren County Auditor Matt Nolan said. “It just is a very small number in modern America to have an income less than that and live in Ohio.”
They suggested adjusting the income level to the median income — which is adjusted annually — which currently sits at $67,769 and increase the exemption to $42,000. They are also considering a caveat that someone has had to live in their home for 20 years.
Most of the pending legislation on property tax reform hasn’t had a fiscal analysis yet, but it appears House Bill 103 would decrease the amount of property taxes brought in by the state by $224 million in fiscal year 2027. The income threshold is $45,000 and exemption amount $50,000.
Co-chair Pat Tiberi, a former state legislator and congressman, said state legislators told him that they won’t make up a reduction in property taxes.
He said Senate President Rob McColley and “they’re not going to write a check.”
“We are trying to do something that ultimately won’t make a difference. We don’t have the ability to make a difference unless we make recommendations that are politically viable,” Tiberi said and later added, “both leaders have said they’re not writing a check, let alone for six figures.”
Seitz said he understands the political landscape, but added the mission of the task force is to provide some options “for real property tax relief, not just shuffling around the pea under the thimble.”
Consolidating services
Tiberi said the task force needs to discuss recommendations for consolidation of services at the local level. Lake County Auditor Chris Galloway concurred.
“Ohio has too many layers of government and too many taxing authorities, that we’re drowning in duplication and taxation because of our concept of being a slave to local control,” he said, adding he wants to recommend the governor convene another work group for that topic. “We do not need 610 school districts in the state of Ohio, we need 94.”
He said it can’t be a suggestion. The state recently enacted legislation to eliminate many of the tiny villages. Tiberi said the only way to effect change and get past local “foolish pride” is “by force and the political will from the legislature, that’s it.”
Sen. Bill Blessing, who co-chaired the previous property tax reform committee and authored two of the circuit breaker bills, told this media outlet that forcing consolidation is “very un-Democratic as far as I’m concerned.”
Not only would people hate losing their local schools, but Blessing said, “I just don’t see that as real, meaningful property tax relief and reform.”
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