The committee met eight times last year, received in-person and written testimony from 60 people and on the New Years Eve deadline delivered an 865-page report. The first 30 pages are an in-depth history of the property tax system in the state and all the legislative and judicial moves that got the state here. The next three pages include 21 recommendations for various ways the general assembly “should” act to address the problem. The rest of the tome includes documents culled from the meetings with various interested parties.
The report notes: “Given the complexities of the property tax system, these recommendations should not be considered as a comprehensive package. Some proposals may contradict others.”
Blessing, a Republican from Colerain Twp., told this media outlet “very much of this is what every member’s wish list is — jam-packed into these recommendations.”
He also issued a statement after the report was released spelling out why the committee didn’t come to a consensus: “In short, the disagreements are over who pays and who benefits.”
“In my opinion as a member outside of my role as co-chair and committee member, I have deep concerns with a number of the recommendations. I suspect this is almost universally true for members on and off the committee and for different reasons. This is due to there being two, mutually exclusive philosophies on how to deliver property tax reform,” Blessing said.
“The first camp, broadly speaking, does not want to spend any state dollars — the locals will bear the burden, or future local revenue will be foregone — and the relief, by and large, must be an across the board cut: if someone gets a 10% property tax break on their $200k home then the same 10% break should apply to someone on their $2M home. The second camp wants to spend state dollars and means-test the relief. Here, local governments and school districts will be held harmless and relief will be targeted to low and middle income Ohioans.”
‘A missed opportunity’
Problems with Ohio’s property tax system have been festering for a long time, but really came to a head when property value hikes mandated by the state tax commissioner topped 40% in some areas.
Pandemic-induced inflation — among other issues — shoved home prices to bloated levels and the state was relying only on 2022 sales. The average value hike was 37% in Butler County, 34% in Montgomery County and 30% in Greene County. Warren County underwent the sexennial reappraisal last year and the average hike was 27%.
How property taxes are calculated in Ohio is complicated, and a big boost in property value doesn’t always trigger large tax increases. Other factors that can fuel large increases include new taxes, charter millage, and whether a school district is at the 20-mill floor.
Credit: Alexis Larsen
Credit: Alexis Larsen
State representatives Bride Rose Sweeney, D-Cleveland, and Dan Troy, D-Willowick, committee members both, also criticized the end result of the six-month committee effort.
“We believe that the report represents a missed opportunity to build consensus and lay the groundwork to finally deliver long-overdue property tax relief for Ohioans on fixed-incomes and lower incomes. We echo the dissent of Majority Co-Chair Sen. Blessing regarding a number of concerning proposals, which do not reflect our views nor the views of the Democratic Caucus,” they wrote in a joint statement.
“We should strive for a property tax system that is less regressive and fairer for all taxpayers. Several of the Majority’s recommendations fall short of that goal and, if implemented, would be detrimental not only to taxpayers but also the critical public services that form the bedrock of our communities and civil society as we know it.”
Recommendations
Many of the recommendations deal with the mechanics of how property taxes are assessed, abated and challenged. Several that have big price tags were already presented for consideration but not passed during the last general assembly:
- The most expensive bills — each chamber introduced their own version — were modeled after the “circuit breaker” approach recommended by Policy Matters Ohio. This approach gives tax breaks or credits to both homeowners and renters based on the percentage of their income they pay in property taxes. The House version would cost an estimated $894.8 million in the first year and the Senate bill would cost approximately $819.6 million. The two bills have differing eligibility thresholds.
- Another expensive proposal the committee is recommending takes direct aim at school funding. Senate Bill 308 would have cost schools approximately $336 million annually by modifying the 20-mill floor funding formula — some of the largest tax increases are due to the 20-mill floor funding formula — and require public hearings before changing unvoted millage.
- House Bill 187 — and it’s twin Senate Bill 153 — was one of the first attempts to tackle the value/tax crisis and originated in Butler County. It mandated a three-year average be used when valuing property among other provisions. This would have produced an estimated average 25% hike for Butler and Montgomery counties and 22% for Greene County as opposed to 37%, 34% and 30% respectively. The revenue loss to local governments over three years was estimated at $539 million. It passed the House but morphed into a temporary enhanced Homestead exemption in the Senate with a three-year cost of $319 million.
- Several other measures were introduced during the last general assembly to revise the Homestead exemption, the recommendation in the report calls for “expanding the traditional Homestead Exemption and an enhanced exemption for disabled veterans including a means-tested increase in the benefit.”
- The report also recommended a failed attempt to eliminate replacement tax levies — which often result in tax increases — but preserve renewals and new levies.
- A new idea that came out of the lengthy hearing process is a tax deferral program, which Blessing says has some merit. Associate State Director Amy Milam with AARP Ohio described the program like this: “Property tax deferrals are used by governments to relieve the tax burden for taxpayers who have built equity in their homes but find paying their property tax bill from current income difficult. Property tax deferrals delay, but do not excuse, taxes, which accrue as an increasing lien until the property is sold or the estate settled.”
Troy told this media outlet he had hoped the committee would “roll up our sleeves and say OK where can we reach consensus,” but that never happened. He said he brought it up and was told “we’ll address that in the budget bill next year.”
“I let loose in committee, I said we’ve been talking about — both sides of the aisle — telling people we’re going to do something about property tax, reform it, we’ve been talking about that for the last three years and we haven’t done a damn thing,” Troy said. “I said we keep BSing the voters, BSing people that oh yeah we’re aware of your problem, we’re going to address it, we haven’t done that.”
Sen. Bill DeMora, a Democrat from Columbus, is equally frustrated and told this media outlet the report “was a waste of paper.” He said he doesn’t fault Blessing and Roemer, “the leadership in the majority in both houses of the legislature decided they didn’t want to do anything with it.”
“We had meetings, I spent all summer in those committee meetings and then they did nothing,” he said. “They published all this stuff and they come out with recommendations that contradict each other, there was no set legislation that came from it and frankly it’s upsetting to spend all that time doing something and have nothing come out of it.”
Blessing said: “If they are trying to find some large consensus it’s not going to happen, I’m positive on that.” He said he wouldn’t necessarily call the exercise a failure, because they did glean valuable information.
“I’m always skeptical of study committees because in this case particularly with controversial issues, I view them as stall tactics,” Blessing said. “Oh let’s not do anything until the study committee meets. Then the study committee goes through and in the process members introduce legislation, we could have done all the bills in committee, in a standing committee like Ways and Means. That’s why I wasn’t thrilled with the study committee to begin with, I felt like it started to become an issue and then it’s like oh let’s freeze and do a study committee, it’s like come on. A lot of people have a pretty good idea of what they want to do and where they want to go so why belabor the point for a year.”
The committee was temporary and Troy’s effort to have it reconstituted failed last year.
Not everyone is disappointed by the laundry list of suggested reforms. Montgomery County Rep. Tom Young, R-Washington Twp., said property tax reform is not a one-size-fits all proposition.
“A lot of the things that we did in the tax study committee are not mutually exclusive,” Young said. “If you do one you need to tie some of the other items together to make it effective for the citizens. I feel that probably is what most people don’t really understand or comprehend because they have made it so complex.”
Marysville Republican Rep. Tracy Richardson agreed to a degree.
“I would have liked the Commission to work in consensus so that we had a unified approach and legislation prior to the end of this General Assembly,” she said. “However, the report does provide recommendations for all members of the General Assembly to read, learn and act upon in the months to come.”
West Chester Twp. Republican Sen. George Lang at the outset of the crisis predicted finding a single or even a few solutions would be difficult. That’s why he and fellow Butler County lawmaker Rep. Thomas Hall, and Adam Bird from Clermont County, introduced their own proposals. They were dubbed “Band aid” bills to give taxpayers immediate relief and had a three-year sunset to give the legislature time to haggle over solutions.
“One of the reasons I am very frustrated is I put that idea out there with a three-year sunset knowing that something like this would happen,” Lang said. “It’s going to take us a long time to figure out the best path forward that we can get enough votes to get passed and to potentially overcome a governor’s veto. I am so frustrated I put the short-term, temporary Band-aid out there and it was killed by other legislators.”
A new budget bill is about to be crafted — lawmakers must pass a new spending plan by the end of June — and everyone says this is the time to consider some of these big spending ideas.
Democratic committee member Sen. Hearcel Craig from Columbus told this media outlet this needs to be a bipartisan effort and it needs to be done now.
“The simple truth is it just can’t be a report that’s sitting on a shelf, we’ve got to do something regarding this property tax issue that will have an impact,” he said. “Whether it’s the committee or the bills that are being introduced. Let’s find a way to work together as a legislature to get the work done.”
Roemer and one other Republican on the committee, Sen. Sandra O’Brien of Ashtabula, did not respond to requests for comment.
This story is the first installment of a two-part examination of what lawmakers who served on the Joint Committee on Property Tax Review and Reform believe needs to be done to give taxpayers relief.
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