Finding ways to reduce skyrocketing property taxes that occurred in Ohio during the past couple of years is a top priority for the Republican-controlled state Legislature.
It’s a difficult balancing act as property owners are screaming for tax relief while public school districts, which get most of those tax dollars, say reductions will severely impact education.
For the most part, Republicans are siding with property owners though there have been a few bills introduced that would have minimal or no impact on school
districts and other government entities that rely on property
taxes.
The issue came to the forefront with recent property reappraisals. In Mahoning County, property values went up 38% while they increased 35% in Trumbull. That doesn’t mean that all homeowners are paying more taxes, but several of them were hit with spikes in their bills.
State Rep. David Thomas, R-Jefferson, who represents portions of Trumbull County and is the House’s point man on property tax reform, has introduced several bills he says will provide relief to homeowners.
Thomas, along with state Rep. Bill Roemer, R-Richfield, recently introduced The Property Tax Relief Now Act that combines several bills — some already introduced by Thomas and others that are new — that would save homeowners $3.5 billion a year.
That means schools and other local government entities would lose that same amount of funding as it’s got to come from somewhere. But it provides some options to those government entities to collect different tax revenues such as income and sales taxes.
“The bold proposals in this bill will directly impact every property owner in Ohio in a very meaningful way on their property tax bill next year,” Thomas said.
Thomas wants to address this issue “before it gets even worse. We have to respond to the needs of our taxpayers who saw record spikes over the last five years and paid more into the property tax system because of high values and local entities accepting the unvoted inside millage.”
The state Legislature in 1977 approved the bill that guarantees each of the 611 school districts in Ohio receive at least 20 mills even though about 400 of the districts are below that guaranteed amount. That permits schools below that 20-mill floor to collect the full 20 mills.
Thomas’ proposal would limit what a homeowner has to
pay in property taxes to districts at the 20-mill floor to the rate of inflation.
Thomas called the bill “the House’s massive tax overhaul.”
Thomas said the package would mean an annual savings of $350 in property taxes for a house valued at $100,000.
Thomas said his proposal could be part of the final budget bill that must be approved by June 30.
“This should have happened five years ago and it should have happened yesterday, and I want it to happen tomorrow,” he said.
Among the bills Thomas previously introduced that are included in this plan is requiring county budget commissions to hold public hearings if a taxing authority carries over more than 30% of its annual budget in reserve and granting it the power to reduce or adjust levies. Another proposal prohibits school districts from increasing tax revenue by changing the purpose of unvoted inside millage.
The bill would prevent all government entities, except townships, from going to the unvoted inside 10-mill assessment.
The bill would allow counties to raise their sales tax by up to 1% with voter approval. Also, cities, school districts and villages could seek approval from voters for income tax increases.
But it would eliminate the option of school districts to seek new substitute tax levies.
Thomas said while government entities would receive less money, this proposal will force them to make cuts in unnecessary expenses.
A bill Thomas introduced in February, called Flip the Script Act, passed the House on Wednesday. The bill would give county auditors control of the sales used to determine valuation changes instead of the Ohio Department of Taxation.
While Thomas is leading the charge in the House, state Sen. Al Cutrona, R-Canfield, recently introduced a bill to provide a 50% property tax reduction for any homeowner who is at least 65 years old regardless of income.
The reduction would cost about $1.5 billion annually with that money coming from the state’s general revenue fund, which is about $100 billion.
Using the existing money from the general revenue fund means that tax collections for various government entities won’t be impacted, he said.
As for giving it to wealthy seniors, Cutrona said there are often situations in which those people have to tap into their pensions that they’ve earned and it looks like they’re making a considerable amount of money. Those people shouldn’t be punished for that, he said.
David Skolnick covers politics for the Tribune Chronicle and The Vindicator.
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