COLUMBUS, Ohio (WCMH) – Property tax relief is top of mind for some lawmakers on Capitol Square, as at least a dozen bills are moving through the Ohio Statehouse between the House and Senate.
“We just can’t kick it down the road and say, ‘it’s a fact of life, people don’t like it, but life’s not fair,’” Representative Daniel Troy (D-Willowick) said. “I think in the case of property taxes, we can make life a little more fair.”
“Property taxes don’t care if you’re a Republican or Democrat,” Representative Thomas Hall (R-Madison Twp.) said. “They affect everybody.”
Hall is sponsoring four of the several property tax bills in the Statehouse right now.
“We have a 200-year-old property tax system, and until last year, we really haven’t put property tax as a priority,” Hall said. “This problem is not going away. I feel like it’s just going to get worse.”
House Bill 263 is one of those bills, it is a bipartisan effort with representative Dani Isaacson (D-Cincinnati).
“You can be property rich, your property values could go up 35%, but your income is fixed, so you don’t have the wherewithal to meet that increase,” Troy said.
HB 263 originally was written to freeze property taxes, for seniors who apply, if they are 70 or older, their income does not exceed $70,000 and they have owned their home for ten or more years. The bill has had several committee hearings and has undergone some changes. Now, that criteria is someone 65 or older, their income cannot exceed $50,000 and there is a two year residency requirement, instead of 10.
“A lot of seniors reached out to us and said you’re penalizing us for downsizing,” Hall said.
There is also House Bill 344 to get rid of replacement levies, to try and alleviate some of the increasing taxes.
And House Bill 57, which ended up in the budget, to address the homestead exemption but more work in that area is still being done.
Hall said Ohio’s homestead exemption is lagging behind other states.
“I think there is a bipartisan feeling that we want to do more on the homestead exemption,” Troy said. “I don’t think we get to a situation where we want to lower everybody’s property taxes, I think first we have to start with let’s address those who are really struggling and having to make tough decisions. Do they pay for their medicine, do they pay for food or do they pay for their property taxes?”
But the bill closest to the finish line is House Bill 187.
“Its goal and aim was to curve out the steep property tax increases that we are seeing,” Hall said.
The bill was voted out of the House, nearly on party line.
“That’s kind of in limbo,” Troy said. “I thought it was bad public policy.
Meanwhile in the Senate, it did receive bipartisan support after several changes were made. Hall said, originally, the bill was primarily meant to allow for the temporary use of three-year average in the Ohio Department of Taxation’s (TAX) uses to review property values, rather than the typical one-year.
“All it was going to do is maybe take a 40% increase from your value to a 29% or 30% increase,” Troy said. “So, it was still going to be a substantial increase in your value.”
Hall said he did approach TAX to work on bringing it from a one-year evaluation to three-year average but was met with pushback.
“They basically told us, ‘If you want any change, you have to come after us and change the law,’” Hall said. “They were not willing to work with us. It was probably one of the worst meetings I have been a part of as a state representative and all we were trying to do was get relief for our residents with these steep property tax increases they are seeing.”
In a statement, a spokesperson for TAX said they have maintained from the beginning that legislation, such as HB187, would be necessary to change this part of the law.
“The ‘three-year average’ concept was recently litigated before the Ohio Board of Tax Appeals (BTA). The BTA concluded that Taxation’s reliance upon the most recent sales data, rather than averaging for the last three years, was consistent with Ohio law. The Ohio Tax Commissioner does not have the authority to unilaterally overturn her constitutional and statutory responsibilities by averaging three years of sales data. This was the basis of the conversation of the meeting Rep. Hall may be referencing. Taxation offered to review any language the members present drafted,” the Department of Taxation wrote in a statement.
But that part of the bill was removed by the Senate. The bill now focuses more on homestead exemptions, reimbursing school districts for lost revenue through property tax cuts, and adds an emergency clause, so the bill becomes effective immediately upon the governor’s signage. Hall said, leadership in each chamber is working to find a compromise. He said his goal is to get the bill passed by the fall.
“I’ve heard from people their taxes are going up $200 a year, I’ve heard from people their taxes are going up $15,000 a year,” Hall said. “The property tax bills, I want to get done tomorrow, kind of thing. Those are bills I’m focused more on than any other legislation we’re working on.”
But, if that bill, as well as other property tax bills, do pass, that means county programs and public education could bear the brunt of the revenue cuts. Hall said public schools get 66% of property tax revenue.
“Their voice is just as important in the room as anyone else’s,” Hall said. “[Public schools] are not the biggest fans of our property tax bills because it is going to be less revenue going towards our schools in some regard.”
Hall said when you change property tax, just like anything else, there’s going to be people who benefit and people who don’t.
“Our school systems are still heavily dependent on local property taxes,” Troy said, “We have to make sure that the revenue stream is still there to fund these critical services, but make sure the contributions to the revenue stream are as fair and uniform as possible.”
Troy helped start the Joint Committee on Property Tax Review and Reform. That committee is meeting to evaluate and recommend best practice changes to Ohio’s tax laws.
“I think the first phase of this whole process is to educate ourselves as legislators as to how the system works,” Troy said.
Troy said the committee is evaluating different ideas to help give relief to Ohioans. He said the state has “diminished their participation” in funding programs like developmental disability ones, that have become more of a local tax.
“So, I think one thing we can do to help controlling the growth of property taxes, is the state should step up to the plate and increase funding in these services,” Troy said.
But Troy said, at the end of the day, it is all a balancing act.
“What we need to do is make it more uniform, more fair and again make sure that no one’s overburdened but make sure no one is under-burdened,” he said. “Because when you under-burden someone, you are going to overburden someone else. You’re just shifting the responsibility.”
The next Joint Committee on Property Tax Review and Reform is on Wednesday.