The bills would allow local governments to establish residential stability zones where qualified, low-income residents can apply for a partial property tax exemption that is equal to a percentage of the increase of their assessed value.
State Rep. Chris Glassburn, D-North Olmsted, applauded the effort, calling it “a unique approach” during a recent House Ways and Means Committee meeting.
“Coming from local government, I did a property tax cut in my community and one of the biggest hesitations we had was we could not target it to anyone, it had to be across the board millage reduction for everyone at the same drop; businesses, residences, didn’t matter if you made a $1 million or were on a fixed income,” he said.
“I appreciate that you are creating an option for local governments to be nuanced about this and thoughtful, both because it gets money where people need it, but also that it frees up money where you can actually maybe do more for those that need it because you’re not using that extra money for folks that don’t.”
As a result of the 2023 property reevaluation update, property values jumped an average 37% in Butler County, 30% in Greene and 34% in Montgomery County. All three counties are in the throes of another property value adjustment and the auditors in Butler and Greene are predicting more double-digit increases.
The tax exemption would be limited to homeowners whose household income is 80% of the area median income, based on U.S. Department of Housing and Urban Development numbers. Butler and Warren counties are in the HUD Cincinnati metro area so the income level for a qualified two-person household would be $71,500. In the Dayton area the income level would be $60,000 and Springfield $55,400.
The bill analysis states communities can establish lower income thresholds and must take into account other asset ownership such as pension funds and trusts.
Applicants must have owned their home for at least a year, but communities can require a longer period of time. The zones expire after 10 years but may be renewed. Homeowners under the age of 60 must reapply every six years.
Sens. Michele Reynolds, R-Canal Winchester; and Hearcel F. Craig, D-Columbus, co-sponsored S.B. 42, which mirrors a bill they introduced in the previous General Assembly that received two hearings. The current bill has had three so far.
Franklin County Auditor Michael Stinziano gave testimony twice in full support of residential stability zones. He said they modeled the impact if such zones had been in place after the huge hikes in 2023 in a few communities like Reynoldsburg. A homeowner who saw their property value jump from $79,100 to $140,000 was hit with a $723 tax increase. If the area had been in a residential stability zone with a 50% exemption, they would have had a $400 tax increase.
“Still significant but much more manageable, especially for older adults likely to be on a fixed income,” Stinziano said.
‘Balancing act’
Local governments and schools would lose revenue if the residential stability zones were established.
Senate Local Government Committee Chairwoman Sen. Sandra O’Brien, R-Ashtabula, found another possible criticism of the proposed legislation, noting that on voted levies if a portion of taxpayers get a break, the rest will take a hit.
“When we’re talking voted millage, when it’s first put on the ballot and whatever it collects, it always collects that,” she said. “So the other taxpayers, their taxes will increase.”
Edward Stockhausen, senior vice president of advocacy and external relations for Cleveland Neighborhood Progress said it might be worth the price.
“It’s about the balancing act of what is the local community willing to bear in order to make sure longtime homeowners can stay, get the benefits of the residential stability zone,” he said. “Is it worth paying for that and losing a little bit of revenue in the short term to have long-term stability for those homeowners?”
O’Brien replied, “I’m not so sure they will see it like that when their taxes go up.”
H.B. 598 is co-sponsored by Rep. Jim Hoops, R-Napoleon and Democratic Rep. Mark Sigrist from Grove City. The bills specify that limited home rule counties, townships and municipalities will enact, establish the parameters — within the confines of the law — and administer the residential stability zones.
State Rep. Dan Troy, D-Willowick asked the sponsors during the first hearing on the measure whether schools — they receive roughly two-thirds of property taxes — could “also have a voice in this in terms of being able to sign off on these.”
“We’re open to any changes that make this a better bill,” Hoops said.
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