Lower my taxes: Ohio House votes for property tax reforms
Lawmaker says 'things will change' because there's a taxpayers' revolt
By Nick Evans
Ohio Capital Journal
COLUMBUS — Ohio House lawmakers approved a pair of property tax measures Wednesday. The bills would give little known county boards greater oversight powers and get into the weeds of Ohio’s byzantine system for classifying taxes and calculating reductions.
At a moment when many Ohioans are frustrated enough to put property tax abolition to a vote, the proposals offer a series of changes likely to bring down property taxes in the short term and rein in future increases.
But the question is whether voters will recognize improvements if they happen. All the changes happen under the hood, indirect tweaks to processes that most taxpayers struggle to understand.
OHIO CAPITAL JOURNAL
GET THE MORNING HEADLINES
After the measures passed committee, the bills’ sponsor, state Rep. David Thomas, R-Jefferson, said it was “probably the most impactful committee in several decades on property tax reform.” Still, he admitted lawmakers are in a difficult spot.
“We are definitely behind what’s happened with taxpayers,” he said. “And we’re just trying to show them give us more time, which is a horrible thing to say to those that are struggling, but that’s really where we’re kind of at.”
“We’re passing these bills — most consequential in decades — and we’re trying to show that things will change, things will get better, and we’re not walking away from this,” he added.
House Speaker Matt Huffman acknowledged that property taxes are obscure to many Ohioans, but lawmakers are trying to simplify the system.
“Part of what we are doing today is to open the black box and shine a light on it,” he said.
As for the proposed amendment abolishing property taxes, the speaker thinks about 40% of voters are a hard ‘yes’ and another 40% are a hard ‘no.’
“As in many elections, it’s the last 10 or 15% who actually make the decision,” he said. “I think that group of voters is going to make their decision based on the things that we do over the next six or seven weeks here.”
County budget commissions
State law gives the treasurer, auditor and prosecutor in each of Ohio’s counties significant oversight for local levies. In the most recent state budget, lawmakers gave these County Budget Commissions the authority to rollback “unnecessary” or “excessive” levies. Gov. Mike DeWine vetoed the provision — zeroing in on the possibility of commissions undoing levies approved just months before by the voters.
In committee, Rep. Thomas proposed an amendment to House Bill 309 adopting suggestions from the governor’s property tax working group. The changes included a five-year safe harbor for new levies and explicit definitions for “unnecessary” and “excessive.”
“The goal of these three were to help give some of the, I guess, guardrails that were requested by local entities and by members for the budget commissions,” Thomas explained.
State Rep. Daniel Troy, D-Willowick, complained the governor’s working group also recommended a two-year safe harbor for renewal levies, but that provision didn’t make it into the amendment. Still, he supported the measure.
Warren County Auditor Matt Nolan, who served on the governor’s working group, praised the committee for adopting the changes. He argued the county budget commission is an important check on rising levies, and because they’re all elected officials there’s accountability for its actions.
“If we make the wrong decision, if we defund a popular entity like (developmental disabilities boards) to the point that they lose money (and) that hurts services, we’re up for election — they are not. And so, we have to make the right decisions, or our voters will tell us,” he said.
On the House floor, though, state Rep. Desiree Tims, D-Dayton, argued that’s not good enough.
“Politicians should not override the will of voters,” she insisted, adding, “I think that we should allow the voters to have the final say.”
When he got a chance to speak, Rep. Thomas argued when voters approve a levy they’re approving a service — not a number.
“If the government can actually do that service for less, and doesn’t need that full tax amount, it’s in everyone’s interest to decrease those rates,” he said.
In several counties, Thomas said, local officials are reducing levies voluntarily, but the bill makes it clear all counties can do so. state can’t rely on voluntary action.
“It takes off the handcuffs,” he said. “Will this be used in every county? No, I can’t tell you that your budget commission in all 88 counties will be as aggressive for the taxpayer, as what I believe they should be.”
But we are recertifying, in black and white stone, that the budget commission has this ability.”
House Bill 309 passed 75-19.
What counts toward the 20-mill floor?
For decades, Ohio has given homeowners a property tax reduction to hold their bills steady as property values rise.
The idea is to block so-called “unvoted” property tax increases. Voters approved a given amount of money at the ballot, the argument goes, and so the taxing authority shouldn’t get more money just because property values have gone up.
To avoid increases, counties regularly reduce property tax rates so that more valuable property yields the same tax revenue.
The problem is school districts can’t reduce millage below 20 mills (or 2%). If property values rise high enough, those reductions stop working because they run into that hard stop at 20 mills. Two income sources, fixed sum levies and income taxes, aren’t calculated toward that 20-mill floor, though.
Ohio House Bill 129 would include them. Thomas explained 237 school districts, or roughly 1/3 of those in the state, voted for levies that aren’t currently counted toward the floor.
“And so, what we’re saying is, moving forward, those 237 schools will not be at the 20-mill floor,” he said, “and therefore will not spike as our values continue to increase.”
Reclassifying levies creates slack in the system — effectively lifting those districts off the 20-mill floor and making room for additional reductions.
Lawmakers recently overrode the governor’s budget veto to eliminate emergency and substitute levies. But in doing so they undid a set of state credits that go along with them. Democrats have warned those credits amount to almost $100 million around the state.
State Rep. Chris Glassburn, D-North Olmstead, thanked Republicans for delaying the impact of that change through a last minute amendment, but insisted “that 100-million-dollar mistake is being punted to five years from now.”
“This is not the property tax relief that our residents are asking for,” he said. “This is one of several technical changes that we’re trying to do to make the system right in the future, but this is not going to change the vast majority of Ohioans’ bills, and to the extent that it helps people, it is to prevent damage we caused in that override.”
Thomas acknowledged the measure is not the “be all, end all” of property tax reform, but said “for 237 of our school districts, for 1/3 of Ohioans, this bill gets us to a much better place.”
The bill passed easily, 81-16.
Follow Ohio Capital Journal Reporter Nick Evans on X or on Bluesky