In face of historic property value hikes, just one bill could offer tax relief

First half tax bills go out in December.

Credit: Nick Graham

Credit: Nick Graham

The state legislature is nibbling around the edges of providing tax relief in the face of historic property value leaps, but it appears only one measure could make it into law in time to help some taxpayers next year.

This week a trio of bills aimed at giving some property taxpayers relief had hearings in the House Ways and Means Committee, they are the most recent attempts to help the most needy manage what will be heavy tax bills for many next year. The bills include:

  • House Bill 254 is a measure that would eliminate all property tax obligations for qualified veterans with a 100% service related disability, among other provisions for less serious injuries. The estimated annual state cost is $35.7 million.
  • HB 263 commonly known as the “70 under 70″ plan freezes property taxes at the current levels for people 70 and older whose household income is less than $70,000 annually. The costs will compound annually but the total for the first three years is $261.1 million.
  • HB 274 takes the standard $25,000 Homestead exemption for seniors and disabled homeowners and doubles it to $50,000. Cost estimates have not been calculated yet.

The hearing was the first for HB 254 and HB 274 and the second for the 70 under 70 plan. Typically there are at least three hearings in the chamber where a bill originated — an introduction, proponent and opponent testimony — before legislation gets to the the floor for a full vote. The process begins all over again on the other side of the legislature. If any changes are made between the house and senate the measure has to go to back for concurrence from the other side. Then it needs the governor’s signature

At this late date, it appears unlikely any of these measures will advance to the governor’s desk in time to give taxpayers relief from huge property value jumps, that will skyrocket tax bills in nearly half of the counties in the state next year. First half tax bills go out in December.

Rep. Thomas Hall, R-Madison Twp. who co-authored the 70 under 70 bill said time has run out.

“Those will not be done in time,” he told the Journal-News. “If anything those will be prime for the next budget which will be spring of ‘25. They’re having hearings on it but they’re not going to go anywhere.”

However, the spirit of these bills are semi-encapsulated in a pending bill that does have a chance of success this year, according to Sen. Bill Blessing, the chairman of the Senate Ways and Means Committee. On Wednesday HB 187 — the Ohio Homeowners Relief Act passed the house by 58 to 26 on Oct. 11 — was referred to his committee. But the bill has taken a drastic turn in the senate.

Blessing said the Senate is leaning toward amending the current legislation that encompasses all property owners to instead only provide tax relief for residents eligible for the Homestead exemption. The pending legislation, which has drawn opposition from a number of groups, adjusts how property values are calculated.

He has dubbed his idea the “universal” Homestead exemption — there is a tentative agreement right now but details are still in flux — it would extend the $25,000 Homestead exemption to all seniors age 65 and over, if they make $75,000 or less and increase the exemption to $30,000. The current income cutoff is $36,100.

He was clear that the benefit won’t be one size fits all, “it’s making that critical link between the benefit you should get and your income.”

It would also increase the Homestead exemption for veterans from $50,000 to $60,000.

He said targeting help to the most needy makes the most sense to him.

“The issue is, what if you’re someone who is making seven figures, your property tax cut is going to be significantly larger at the same time that you don’t necessarily need the relief that say a low income person or a senior citizen might need?” Blessing said. “Bottom line is anything that’s broad, treating everybody the same without regard to income or property valuation I’d struggle with, and would want to keep it to lower and middle income and seniors.”

The state is trying to find a way to mitigate huge property value increases that are a result of state mandated reassessments that rely heavily on the grossly inflated home prices from 2022. They are increasing an average 37% in Butler County, 34% in Montgomery County and 29% in Greene County.

In its current form HB 187 mandates a three-year equally weighted average value calculation which would bring the increases down to an estimated average 25% hike for Butler and Montgomery counties and 22% for Greene County. It also cuts tax revenues to local governments and schools by $539 million over three years statewide.

The universal Homestead plan is estimated to cost $319 million over three years — HB 187 was dubbed a band-aid to “stop the bleeding” while broader property tax reforms are developed hence the three-year sunset — and the tentative proposal is a 50/50 split with the local taxing entities.

The state picks up the tab for Homestead exemptions as a whole, reimbursing local taxing bodies for the tax breaks. Blessing said he wanted the state to pick up the whole tab for his plan, but understands why some say the locals should share the burden, because many are reaping huge tax windfalls from the higher values.

The County Auditors Association of Ohio vehemently opposed the original version of HB 187 and its twin bill SB 153 for several reasons. Warren County Auditor Matt Nolan, who has been speaking for the association, told the Journal-News they can live with the new rendition of HB 187 but have recommended a few tweaks.

He said the 50/50 split with the locals must consider some of the entities that won’t get a windfall from the property value hike. He suggested if an entity doesn’t receive inside millage they get fully reimbursed by the state.

“The entities that don’t have inside millage would lose money,” Nolan said. “So like the ambulance district up in Carlisle, they don’t get any inside millage so I could raise the value 100% they wouldn’t get one dime.”

He said the fact they even were discussing those nitty gritty details shows “we’re pretty close because that’s how deep down we were digging it.”

Rep. Daniel Troy, a Democrat from Willowick, was also a vocal opponent during the hearing process, mainly because he wants to let the new committee established in the budget to study the property tax system do it’s work before working at it in a “piecemeal” fashion.

He told the Journal-News he favors this idea too, in fact he tried to amend HB 187 on the house floor to include a Homestead revision but was shot down.

“I did offer an amendment to say let’s put some skin in the game if we really want to help people with property taxes,” he said. “Let’s drastically update the Homestead exemption and really help those seniors on fixed incomes.”

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