The Ohio House of Representatives recently passed House Bills 186 and 335, which would limit tax increases that result from future growth in property values. The bills are now before the Ohio Senate.
But Montgomery County Auditor Karl Keith said the legislation doesn’t address the needs of thousands of Dayton-area property owners.
“It’s way too early to claim mission accomplished. More must be done for our homeowners,” Keith said. “If the legislature stops now, millions of Ohioans will not get the relief they need.”
Sales tax holiday
HB 186, which was developed by the County Auditors’ Association of Ohio, would cap revenue increases from levies affected by Ohio’s 20-mill school funding guarantee.
The bill would authorize a property tax credit for property owners located in a school district at the 20-mill floor.
It would pay for this using the state’s Expanded Sales Tax Holiday Fund by canceling Ohio’s expanded sales tax holiday at least in 2026. Instead of a two-week sales tax holiday that Ohio had this year, there would be a three-day holiday for back-to-school items.
While the sales tax holiday benefits all shoppers in Montgomery County, the 20-mill floor impacts few homeowners in the county.
Only 10% of Montgomery County’s 250,000 properties — those in Miamisburg, Valley View and New Lebanon school districts — would receive the 20-mill floor credit offered by HB 186.
Of the county’s 16 school districts, those three are the only ones on the floor. This means the other 90% of properties would not benefit from the relief provided in this legislation.
“This bill is a big deal for homeowners in 20-mill floor districts. I don’t want to undersell that, but I also don’t want to mislead anyone,” Keith said. “We advocated for this change because it will be more meaningful in other counties. Unfortunately, here in Montgomery County, 90% of our property owners will not see any meaningful benefit from this legislation.”
20-mill floor
By Ohio law, property in all counties is reappraised in cycles every six years, with property values updated every third year based on recent sales. Once values are assessed, the county auditor determines tax rates. This includes lowering the tax rate for most levies, which are designed to collect a certain amount of money.
But that doesn’t apply to some taxes for school districts at the 20-mill floor. The 20-mill floor stipulates that effective millage for certain school levies cannot fall short of 20 mills. Households in districts that have hit the 20-mill floor pay more to their school districts as the value of their homes increase.
Keith said the 20-mill floor issue “needs to be addressed” statewide.
The 20-mill floor is seen as the culprit behind huge property tax spikes that are crippling many homeowners. According to a September report by the Legislative Services Commission, 477 of 611 school districts were on the floor last year. The bulk of the districts are in rural areas and only 25 are urban school districts.
Inside millage
HB 335 wouldn’t decrease property taxes for Montgomery County property owners, but would slightly reduce an expected increase.
Inside millage is about 10 mills of every property tax bill that is divided between the county, schools and cities. Like school taxes at the 20-mill floor, it grows along with property values and isn’t adjusted like with voted levies. HB 335 would limit growth of inside millage to the rate of inflation.
Keith says Montgomery County homeowners will see neither a noticeable nor an immediate impact on their tax bills.
The bill’s proposed cap would start in Montgomery County in 2027. And property owners would likely still see their taxes go up that year, but the increase could be about $20 less per $100,000 in home value, Keith estimates.
“Our residents are struggling with the rising costs of homeownership. They’re telling us they can’t afford their taxes at the level they are right now,” Keith said. “I don’t think $20 off a future tax increase is what they’re looking for.”
State-funded programs
The state’s budget bill, signed by Gov. Mike DeWine earlier this year, allows county commissions to create their own Homestead Exemption and Owner Occupancy Credit programs.
These so-called “piggyback” programs would double the savings offered to qualifying homeowners in participating counties, with that inclusion ultimately being up to the county board of commissioners.
Several county commissions in Ohio, including Miami County, will implement local tax relief programs through this new provision.
But critics of the piggyback programs say property tax relief would come at the expense of local governments that are funded through property taxes. Many auditor’s office leaders, including Keith, call for property tax relief to come from the state.
Keith said the expansion of the state’s existing Homestead Exemption program and Owner Occupancy Credit would provide relief to thousands of local households.
The Homestead Exemption provides savings to lower-income seniors and disabled homeowners. Roughly 32,000 Montgomery County residents are benefiting from this exemption, representing $20.5 million in savings.
A homeowner must be at least 65 years old or permanently and totally disabled to qualify for the Homestead Exemption, which covers the first $28,000 of property valuation for a dwelling. The household adjusted gross income cannot exceed $40,000 to qualify in 2025.
The Owner Occupancy Credit offers a discount to all homeowners on their primary residences. In Montgomery County, there are 133,500 properties on the Owner Occupancy Credit program. This provides roughly $11.5 million in relief.
Denise Callahan contributed to this report.
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