Ohio Lawmakers Send Five Property Tax Reform Measures to the Governor – Cleveland Scene

Ohio Gov. Mike DeWine has some decisions to make on property tax reform. State lawmakers have signed off on five proposals in recent weeks, and now they’re headed for DeWine’s desk.

Although the governor has expressed concern about rising property taxes, he has bucked earlier legislative proposals tucked into the state budget.

Lawmakers initially promised to override several of those vetoes but pulled back after overriding just one, which prohibited certain kinds of levies including substitute and emergency levies.

Instead, Republican lawmakers in the House launched a kind of property tax blitzkrieg, led in large part by former Ashtabula County auditor, state Rep. David Thomas, R-Jefferson.

Thomas is a primary sponsor on all five of the bills lawmakers sent to DeWine.

The proposals empower county officials to pare back levies previously approved by voters, create more room for tax reductions, limit the growth of tax bills to the rate of inflation, and shift the burden of proof in valuation disputes.

On the Ohio Senate floor last week, another former Ashtabula County auditor, state Sen. Sandra O’Brien, R-Ashtabula, reduced it to a simple equation.

“Our taxpayers, whom we represent, want property tax relief,” she said. “The bills that we are about to vote on, offer them that relief.”

She reminded lawmakers they have little margin for error with grassroots organizers around the state collecting signatures for a ballot measure eliminating property taxes outright.

“That scenario, if successful, would place Ohio at the edge of the abyss,” O’Brien said. “Today, we have the chance to show the taxpayers of Ohio that we hear their pleas for property tax relief.”

Speaking at an event Friday, DeWine pointed to the property tax working group he set up after vetoing lawmakers’ budget proposals.

He explained the group was tasked with “coming up with solutions where there’s no great solutions, frankly, no matter what we do.”

The working group had to balance funding for local services like schools against homeowners struggling to make ends meet.

DeWine acknowledged he doesn’t like all the compromises they reached, but insisted the group did a very good job.

“So, I’ll judge those bills based upon what the committee came up with,” he said, “and in a few days, we’ll have some comments about that.”

How the bills compare to recommendations

Ohio House Bills 186 and 335 together limit the increase of property taxes to overall rate of inflation.

The state constitution gives local governments the authority to levy up to 10 mills (or 1%) of property tax without prior voter approval.

That constitutionally guaranteed amount is known as inside millage, while any additional taxes approved at the ballot are known as outside millage.

Ohio House Bill 186 applies to outside millage and Ohio House Bill 335 applies to inside millage.

DeWine’s working group explicitly endorsed the former and encouraged lawmakers to apply the same inflationary cap to inside millage.

Ohio has a tax reduction system that lowers a homeowners rates to keep their tax bill steady for decades. But there’s an important limitation. The total amount of school levies can’t dip below 20 mills.

Ohio House Bill 129 includes additional taxes in the calculation of the 20-mill floor.

In particular the substitute and emergency levies lawmakers prohibited going forward didn’t previously count toward the floor.

The working group suggested they should and be renamed as fixed sum levies, as well. I

mportantly, the members urged lawmakers to maintain a 12.5% state share of funding if those taxes get renewed.

Without that so-called ‘rollback’ districts would get less money for the same levy. All told, the gap would be about $96 million.

Lawmakers agreed to keep the rollback, but in the House version, allowed for only one renewal of expiring levies.

Critics warned that would delay rather than solve the problem. The Senate tacked on an amendment to allow ongoing renewals.

Ohio House Bill 309 allows the county budget commission, made up the local auditor, treasurer, and prosecutor, to reduce voted levies they deem unnecessary or excessive.

DeWine’s veto message said that “breaches” voters’ approval.

His property tax working group determined the commission should have the authority but insisted on guardrails.  They recommended a five-year safe harbor for new levies and two years for renewals.

The group also said there should be explicit definitions of “excessive” and “unnecessary.”

State lawmakers took up the definitions, and in the House, they agreed to a five-year safe harbor for new levies.

Renewals, however, would be eligible for reductions immediately.

In the Senate, lawmakers trimmed further — reducing the protections to just one year after voter approval.

Ohio House Bill 124 gives county auditors the benefit of the doubt when it comes to property valuations.

Ohio counties do a full reappraisal on six-year cycles, but they update values three years in based on statistical trends.

Under current law, if state tax officials object to the county’s math, the auditor’s only option is to go to the board of tax appeals.

The bill would instead put the onus on the Department of Taxation to bring an appeal if it disputes the auditor’s findings.

That proposal wasn’t part of the working group’s recommendations, but it cruised through committee without any opposition.

Originally published by the Ohio Capital Journal. Republished here with permission.

Related