As it stands today the standard Homestead exemption shields the first $25,000 of a property’s value from taxation — the amount is adjusted for inflation — and the homeowner must be at least 65 years old or permanently and totally disabled. The income threshold is $41,000.
The bill adjusts both amounts upward, but there is a caveat that county commissioners must buy into the local Homestead “piggyback” option that was authorized in the state budget bill last summer.
According to the County Commissioners Association of Ohio tally, only nine of 88 counties have adopted the option that essentially doubles the exemption using local dollars. Locally only Butler and Miami counties adopted the tax break and the cost amounted to roughly $7.6 million and $2.7 million, respectively.
Here is the statewide impact to eligible taxpayers, according to the Legislative Service Commission fiscal note:
“The bill requires the state to reimburse half of the local option homestead exemption and increases the income eligibility limit for the homestead exemption to $55,000,” the report reads. “It would reduce taxpayers’ amount owed up to an estimated $345 million for tax year 2026, and $329 million for tax year 2027, if all 88 counties adopted a resolution to grant the optional exemption.”
Originally the bill only addressed the property value exemption amount and the increased cost to the state — if all 88 counties opt in — was estimated at $96 million for fiscal year 2027 and $190 million in 2028 when the full reimbursement kicks in. Richardson told the committee that version lacked support.
“Numerous legislators rejected the premise of the bill saying the state already fully reimburses local governments for the current exemption and that any change should require local government funding as well,” she said.
The LSC fiscal note says the state’s obligation under the amended bill drops to $92 million in fiscal 2027 and $182 million after that.
Richardson told this news outlet she crafted this bill to “incentivize” local governments to participate in this tax savings that so many senior citizens need.
“It incentivizes because before, all of that would be paid by local governments and now my bill says the state is going to step up and work with the local governments at 50% of that $25,000,” she said. “What I’m trying to do is get every county in the state of Ohio to opt into the local Homestead exemption.”
State lawmakers included the so-called “piggyback provision” in the state budget in response to skyrocketing property taxes ever since the pandemic skewed home values and sent them through the roof. Unlike other tax proposals in the budget, Gov. Mike DeWine did not veto this provision.
The law gave county commissioners the authority to essentially double the Homestead exemption and 2.5% owner-occupancy credits for eligible property owners using local dollars. Only five counties adopted the owner-occupancy credit option, none from this area.
Nick Ciolli, a research analyst with CCAO, explained why so few counties have opted to piggyback the state programs, based on informal conversations with their members.
“Generally they are comfortable with kind of giving up their own revenue,” Ciolli told this news outlet. “But since those piggyback options would effect the schools in the county, the townships and municipalities and the handful of special districts, there was some hesitancy to do the options, because of the lack of familiarity with those other governments’ budgets and just a hesitancy to effect their revenue.”
During the committee meeting Democratic Rep. Dan Troy of Willowick said essentially the same thing but also wondered why they wouldn’t also offer to pay part of the local share of the 2.5% owner-occupied credit.
He thanked his Republican colleagues for putting “more skin the game” but noted in 2010 the state paid $1.8 billion toward local property tax relief, or about 8% of the budget, today he said the $1.9 million in state-paid relief amounts to roughly 4.1%, “the state has actually been contributing less and less and less.”
“Don’t you think we’re in a position in these tough times with these property values skyrocketing to provide even more relief than this particular bill does,” Troy asked.
Richardson replied, “I would say that we’re giving max amount of relief for the least amount of cost to the state, who are the taxpayers as well.”
Troy said his largest school district stands to lose roughly $20 million over the next several years due to recent property tax reforms.
“If those entities have to go back to the ballot and say I’ve got to go back because I’m losing $22 million over the next six years, we’re kind of going back to square one again,” he said. “You’re going to be asking the seniors to pay more property taxes.”
The legislature enacted roughly $3.8 billion worth of property tax reforms last year and House Republican leadership have said repeatedly they plan to continue work on reforming the system, but spending more state money is not on the table.
When asked if she thinks H.B. 261 stands a chance at passing, Richardson told this news outlet, “I will do everything within my authority to convey as best I can the need for additional support for seniors.”
Lorenz said they need to also work on the opposite side of the tax reform equation.
“Stating the obvious here but collectively we’ve got a huge spending problem in this state and anything we can do to mitigate that and shift over to help our most vulnerable population is something we need to continually work on,” he said.
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