More property tax reform legislation in the Ohio Senate
A series of property tax bills are moving through the Ohio legislature to limit property tax increases on tax bills as soon as spring.
Ohio’s rising costs, inflation and skyrocketing property values have drawn the attention of both taxpayers and legislators. Currently, four bills are pending in the Ohio Senate regarding unvoted increases and changes to property tax reevaluations this year.
Property tax reform vetoed earlier this year
Changes to property taxes have been on the legislative radar since the start of the year, when Governor Mike DeWine vetoed a provision in the state budget bill that would have altered how property taxes are collected, putting him at odds with the Republican Party. A working group was created at DeWine’s request following the dispute to analyze possible solutions and prepare recommendations to address the high property taxes across the state.
The working group’s published recommendations and suggestions were incorporated into the proposed legislation not moving through the legislature. Earlier, the legislature overrode the Governor’s veto by approving House Bills with clarifying language of tax calculations and strengthening levy oversight provisions.
“We made those small tweaks totally not worth the vetoes,” said David Thomas, an Ohio State Representative, “but semantics.”
Thomas, an Ohio Representative from Ashtabula County, introduced a handful of bills on the topic, saying the legislature has not taken strong action on property taxes in almost 50 years.
Also stirring up property tax discussions this year is Ohio Gubernatorial candidate Vivek Ramaswamy, who has made tax cut promises since announcing his candidacy for governor.
What changes to property taxes mean
Tax experts weighing in on the topic believe the proposed legislation so far is reasonable, according to Mind Nett, an Associate Professor and CPA at Kent State University, especially as people are feeling the weight of increased costs across the board.
“It sounds logical based on trying to not outpace inflation and trying to provide relief to those who can’t afford it,” said Nett. “But again, the biggest question is where would the offsets come from because the tax bills aren’t going to go down?”
Abolishing property taxes is a growing online sentiment that legislators lack a solution for, if citizens want to maintain the current level of safety and services. Representative Michael Dovilla says eliminating property tax funding for these emergency services would create a $22 billion gap in local services.
“People like their streets plowed. They like the rescue squad to come when they call 911. They like their schools to offer a high-quality education to young people,” said Dovilla.
“These are all things that, as responsible citizens, we want to have support for. The question is just how we do it.”
Dovilla, who covers parts of Cuyahoga County in District 17, was adamant that property taxes are the top issue for Ohio legislators. The proposed legislation eliminates the unvoted increases, called inside millage, to cap future spikes, according to Thomas.
What’s awaiting approval?
Four bills, introduced by Thomas, are in the Ohio Senate.
House Bill 129 changes the way property taxes are calculated by separating home value increases from tax increases.
House Bill 309 reduces property tax collections by giving County Budget Commissions more power to adjust levies and lower tax rates when local governments collect more than needed.
House Bill 335 would cap local property tax increases tied to rising home values and let counties, cities, and schools lower property taxes when they adopt new income or sales taxes.
House Bill 186 would change how school district property taxes are calculated and cap how much the taxes can rise with inflation.
Concerns over changes
Thomas said the changes are to provide relief when reappraisals cause taxes to climb faster than inflation. However, school districts have taken to social media to express concerns about losing funding due to these tax changes.
“When emergency and replacement levies come up, they [school districts] were allowed to use the increased value of the homes. And now you’re no longer allowed to do that,” said Nett. “So right now, from the school’s perspective, the school is facing the same increased costs just like everyone else, right? Their utilities are going up, their payroll is going up, their health care costs are soaring, their food bills are going up. But yet they have voted or overridden in the veto to keep, you know, the value property values stagnant when going back and asking for money.”
In conversations with Ohio superintendents who expressed concerns, Thomas said no one is happy when discussing taxes.
“I think just the big thing is, that we are frustrated. We’re upset just like taxpayers are,” Thomas said. “And we are working as best we can to respond to those angers and frustrations and correct the many wrongs that happened over the past couple of years.”
What the legislation means for your property tax bill
Ohio law requires school districts to collect at least 20 effective mills for their operating expenses. For districts already at this minimum floor, there are only two ways to raise more revenue effectively. One was through reassessing rising home values, which raises your tax bill, or through voter-passed levy increases.
The proposed legislation requires local governments and school districts to be fully transparent about how your property tax bill is calculated and what you are paying for.
Representative Thomas said he hopes these bills will be signed by the Governor before Thanksgiving so that residents can see a change in their property tax bills for the second half of the year.
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