COMMUNITY CONVERSATION: What does the proposed property tax increase mean for you?

Credit: Nick Graham

Credit: Nick Graham

By Ohio law, property in all counties is reappraised every six years, with property values updated every third year based on recent sales. This year, some areas of Montgomery County are projected to see property value increases up to 48%, and taxes in some areas could increase up to 12%.

Whether you own a home or rent, the new valuation and taxes will have significant effects for those living in the Miami Valley.

To help answer your questions about these increases, the Dayton Daily News hosted a Community Conversation on the Dayton Daily News Facebook page. Community Impact Editor Nick Hrkman and reporter Sydney Dawes led a discussion with panelists from around the region, including:



Greg Blatt, president of Dayton Realtors

Destiny Brown, Community Organizer for Advocates for Basic Legal Equality, Inc. (ABLE)

Credit: Nick Graham

Credit: Nick Graham

Thomas Hall, Ohio State Rep. for District 46

Karl Keith, Montgomery County Auditor

Editor’s Note: The transcript below has been edited for brevity and clarity. You can watch the full recording of the discussion on the Dayton Daily News Facebook page or on our website.

COMMUNITY CONVERSATIONS: What does the proposed property tax increase mean for you?

To help answer your questions about property tax increases, the Dayton Daily News will host a Community Conversation at noon on Wednesday, Nov. 29 on the Dayton Daily News Facebook page. Community Impact Editor Nick Hrkman and reporter Sydney Dawes will lead a discussion with panelists from around the region.

Posted by Dayton Daily News on Wednesday, November 29, 2023

How is the value of a property determined and why is everyone talking about property taxes this year?

Karl Keith: That question is complicated and complex. Every county in Ohio is required do a comprehensive revaluation once every six years. But depending on where you are in the cycle will affect how you do things and every county is not on the same cycle. During the six-year update’s comprehensive revaluation, we look at each individual property and look at property characteristics and do comparisons of value based upon sales of similar properties and update each individual property with a new one. Midway through that cycle, we focus exclusively on the market and what’s happened to sales in the area. And we do that by look at sales and adjust values according to what’s happened in the in the real estate market. So this year in Montgomery County, we’re doing what’s called a triennial update, the market update.

Where does the money collected through property taxes go?

Karl Keith: In Montgomery County, we’ll collect a billion dollars in local property taxes this year. Where’s all this money going? About 60% of every dollar we collect goes to local schools, and that’s pretty consistent across the state. In Montgomery County, another 15% goes to support human services. The remainder goes to support libraries and parks and cities and townships, roads, and bridges. The bulk of it is going to local schools — 4% of every dollar goes to support Sinclair Community College. So it depends on what the voters have decided in determining levies. One of the things we have to ask ourselves is what’s the best way to fund some of these local services? We had a number of local schools in Montgomery County this year that had big levies on the ballot, despite the value increases, they were still asking for more money. And so this is when we say, we don’t have a value problem, we have a tax problem.

Greg Blatt: I’ve had many conversations around the tax increases and schools always come up. In 1998, there was a case, DeRolph v. Ohio, that went all the way to the Ohio Supreme Court. And that case, the Supreme Court deemed that the way we fund schools in Ohio is unconstitutional under the Ohio Constitution. So I’m going to ask Representative Hall about how we look at the tax burdens and the tax funding of schools and things like that. Is school funding actually going to get some attention after almost 30 years of a Supreme Court ruling that says it’s unconstitutional? And why hasn’t either party taken this up?

Thomas Hall: I think that we have made progress. We addressed it in 2021 with the Cupp-Patterson fair school funding model. We have enacted phase two of Cupp-Patterson in the recent budget, and we will enact hopefully in the next budget, the final phase-in for federal funding. This, just like property taxes, is very complex and deals with schools in different parts of the state. One of the biggest things that we focused on this recent budget was fully funding the fair school funding plan. With phase two there was also the EdChoice expansion where, I believe, it was around $3 billion of our $86 billion state operating budget on public education. In late April, early May, school districts found out about these large value increases, ran to their school boards and said, ‘Hey, we need to adjust our budgets, we’re getting ready to get 30% more funds than we had originally forecasted.’ So now they’re coming to me saying, ‘Hey, you want to cut our funds?’ No, we voted for fair school funding for the for the second phase-in which, in Butler County, is a huge thing for a lot of the schools that are going to see an increase in funds from the state. But now they’re upset because they view our bills as trying to protect the property owner, which I feel like has never been in the room in Columbus. And you see a lot of other bills getting introduced that address property tax reform. I think now more than ever, we are on the cutting edge of actual reform.

Greg Blatt: Several years ago, when John Kasich was an office, Director Blair came and spoke and this very question was asked, why is the legislature not making it a priority to abide by The Supreme Court’s ruling of unconstitutionality? And his comment to me was we just don’t have an appetite. I would suggest the reason the legislature doesn’t have an appetite is because the constituency doesn’t call their legislators and let them know of their concerns about the unconstitutionality of this process. So I might suggest, pick up the phone, call your local state representative, call your local state senator, and let them know of your concerns about this, the way this is funded. Everybody wants to vote for good schools. But on the funding side, you’ve got people that are voting for these levees that aren’t going to be subject to the tax they’re voting for. So there’s a little bit of the inequality. So again, I’m going to go back and say the legislature needs to look at this and figure out a way to make it more equitable.

Destiny Brown: I want to reiterate Greg’s point on an equitable source of funding, but from a different perspective. The other reality is a lot of these communities are still dealing with the impacts of redlining in housing policy and property value allocation and all of those things. So when we talk about equitable funding sources for schools, the impact of that widens the gap and creates more disparity and perpetuates that. So from a different lens, I wanted to reiterate the importance of an equitable funding stream.

Thomas Hall: What we’ve tried to do is look at solutions in the Ohio House that we thought made sense. Just yesterday, we had our first and second hearing in the Ohio Senate on our House Bill 187. What this bill is trying to do is take the value process, and instead of focusing on one year’s worth of data, we want to use three years worth of data to kind of smooth out that that increase. Right now, a lot of these updates focus on just tax year 2022. Auditor Keith and I have had many different conversations and he believes that it’s not the valuation issue, it’s more of a tax issue. And I absolutely agree with him. I’m happy to say that in our recent budget, we set up a property tax study review committee to look at the entire state of Ohio and look at the way property taxes are calculated and try to be better. We took large steps in our in our budget as well with the income tax in Ohio, getting Ohio’s income tax down to just the two brackets, over $3 billion back into the pockets of hardworking Ohioans. We are literally taxing people out of their own homes in some of these situations. And that’s what we don’t want to happen. We want people to choose Ohio, we want Ohio to be that star that everybody comes to. And right now we’re just lacking in the property tax side of things.

Karl Keith: Most counties are pretty active about providing property owners an opportunity to meet with the county and meet with officials to review their values and to bring up issues that we may not be aware of. We’re all doing these as a mass appraisal. We don’t go in people’s homes. It’s a mass appraisal technique that we use, and so people know more about their property than we do. And so we try to provide people an opportunity to meet with us before we finalize. And then even after the values are finalized, there’s a formal appeal process that people can participate in. And we could encourage people to take, take advantage of those opportunities and bring issues to our attention that we may not be aware of that could impact the value of their property.

We’ve heard from readers that the reported increases don’t align with the proposed increases they’ve received. Why is that?

Karl Keith: A lot of these numbers that have been tossed around can be misleading. You have the county-wide number, which reflects the aggregate increase for every property owner in the county over the previous year. And that’s going to vary wildly by community by city, by area. We divide Montgomery County into 1,300 neighborhoods and we look at each one of those neighborhoods differently based upon what has happened in the real estate market. 51% of the growth we’re seeing this year is occurring in the southern suburbs and Centerville, Washington Township, Kettering, that’s where the most real estate activity has occurred. And so that’s where the numbers are going to be higher than other places in the county.

What is the homestead exemption expansion and how does that work for disabled veterans or Ohioans who might have lower income?

Thomas Hall: Under current Ohio law, $36,100 is the income threshold for the homestead exemption. You can claim up to $25,000 off of your house, disabled veterans up to $50,000. What we found in Ohio is that we are behind in regards to homestead exemptions. Other states do it much better than Ohio, including Florida and Texas. So what we’re trying to do with the homestead expansion is looking at expanding the income threshold to a $70,000 or $75,000 mark, and make it like a grading scale. So if someone makes $70,000, their deduction on their property taxes would be less than someone that makes $40,000, they could claim more of a homestead exemption to get their value down to pay less taxes.

How does the rising cost and value impact the rental market differently than the homeowner market?

Destiny Brown: I think sometimes a renter may not have an interest in the conversation around property taxes at all because the assumption is that it’s only for homeowners. If a landlord has an increase on the value of their property, they’re likely going to make up the difference in the rent that the tenant is paying. It will directly impact what the tenant is paying monthly. Whether they are homeowners or not, it ultimately impacts what people are paying and what housing costs, whether they’re renting or owning.

Greg Blatt: A lot of people think that property taxes do not affect renters. And they really do because as Destiny said, the landlords pass that on. The landlords have to, it’s an investment property, they have to make their investment returns. And unfortunately, the people that get hurt the most are the people we always say we’re trying to help. And that’s our lower income people, and and people on fixed incomes and those type of things. And they’re generally our renters. They do get hit, probably as hard as anybody else. And again, it goes back to how we’re funding everything, but it clearly has an impact on the renter in terms of what they can afford and be able to stay in those properties.

Karl Keith: We hear this a lot in my office and over the years about renters. Particularly this year, when we’ve been out doing community forums and talking about their values, we’ll hear from people complain that renters shouldn’t be allowed to vote for levies, that renters shouldn’t be able to shouldn’t be permitted to participate in this process, because they don’t own the property. And we’re always trying to explain to folks, ‘Well, you know, those renters are really paying a portion of that tax.’ The landlords are passing those costs on to their renters.

Destiny Brown: These mentalities are what perpetuate these exclusionary practices. The perception that this doesn’t impact renters. The impact on people is different depending on what your demographic is or what community you live in. It’s a ripple effect that impacts everybody differently, but it drives up costs for everyone.

Karl Keith: We hear similar complaints: ‘Why should I pay taxes to support the local schools, I don’t have kids in school?’ or ‘My kids are grown’ or ‘I don’t have kids going to Sinclair Community College.’ And so sometimes you have to explain to people, you’re supporting the community, whether your kids are in the schools, or you’re driving on the roads, enjoying good libraries, having these types of amenities improves the quality of life for all of us. And so it’s difficult sometimes when you start talking about excluding people from participating in the process that you lose sight of the fact that everybody benefits from this and everybody should be involved in this.