Ohio lawmakers ponder the right property tax relief effort

COLUMBUS, Ohio (WCMH) -- Ohio House members just made major changes to the state budget, which must pass by the end of June.  

One of those changes is a new effort to bring down property taxes, but it is drawing a partisan line in the sand. 

“It’s a bait and switch,” Ohio Senate Minority Leader Nickie Antonio (D-Lakewood) said. 

“I think it's excellent,” Ohio Rep. David Thomas (R-Jefferson) said. 

Bringing Ohioans property tax relief has been an ongoing effort at the Ohio Statehouse. Little has been done in the past several years, but now having this measure in the state budget could fast-track relief.    

So, what would the proposal in the state budget do?  

It requires a County Budget Commission to reduce the property tax rates of homeowners who live in certain school districts. In summary, it will work like this: if a school district has “carry-over” money from one school year to another that is more than 25% of what it spent the previous school year, property taxes go down in that district. 

“Every entity at the local level should only be taxing what is necessary for services in the following years,” Thomas said. “And if they're taxing more than what was necessary, then their tax rates should be decreased.”

Thomas is a former county auditor and is working on several property tax relief bills himself, and while, from his perspective, this provision is positive, former House Speaker Jason Stephens (R-Kitts Hill) is also a former county auditor. He sees it differently. 

“I think, in concept, it makes sense,” he said. “But when you look at the timing of when revenues come in for school districts when their fiscal year hits, it can be somewhat challenging to make that work in real life.” 

Stephens said the timing of when property tax rates are changed, and the amount of money a school gets will be critical.  

“It's going to be real important that the timing and the way that it's implemented be done correctly,” he said. “Otherwise, it can have consequences for school districts that could be really bad.” 

Stephens added that no school district is the same, and having an emergency fund serves each one differently.

“We have 600-and-some-odd school districts and if you've seen one, you've seen one,” he said. “They're all different, they all have different tax bases, they all have different, challenges and opportunities.” 

Right now, according to House Finance Chair Brian Stewart (R-Ashville), more than 86% of Ohio’s public school districts have an excess fund that is more than 25%. He said across the state, excess funds have grown from $3.6 billion to $10.5 billion in the past decade. 

Thomas said while he understands that emergency funds are important, there is a difference between excess and emergency.  

“I think this speaks at what we're seeing right now, which is huge amounts of carry-over and cash,” Thomas said. “That should be back for the taxpayers, that’s just really, frankly, sitting there and that should not be the case.” 

Thomas added that school districts tend to be the largest share of any one Ohioans' property tax bill. 

“What is actually comprehensive property tax reform? Frankly, I'd say base level, it’s actually spending reform,” Thomas said. 

But will this relief go far enough? Stephens said that in the immediate future, he thinks so.   

“The way that it's written now, I think would be a one-time,” he said. “Once you get to that 25%, then the taxes would still keep coming in. So, if there is a school district that is constantly bringing in more money than they are spending on a regular basis year after year, then it might give a little bit of leeway.” 

Thomas said that while the biggest relief might come up front, property tax bills will consistently stay lower under this proposal thereafter since schools will need to stay at a 25% or lower carry-over rate. 

“That's kind of the point,” he said. “School districts shouldn't be carrying over these large amounts of money." 

Thomas adds that County Budget Commissions already have the authority to decrease property taxes by these means, so now all the state is saying is that those commissions are required, too.

As lawmakers make sense of the budget amendments, Democratic leaders question why this property tax proposal, which has not been vetted, is the one to make it into the state budget, considering the more than a dozen other ideas. 

“The state of Ohio, the general assembly, has a responsibility to deal with those out-of-control property taxes,” Antonio said. “We should not be blaming the schools. That’s not the right way to go.” 

“The priority [of the Republican majority] is not to provide direct property tax relief,” Ohio House Minority Leader Allison Russo (D-Upper Arlington) said. “There are at least five or six pieces of legislation that are bipartisan bills that are real efforts to give property tax relief.” 

The state budget will likely not pass until the end of June. Ohio Senate President Rob McColley (R-Napoleon) said he is reserving comment on this, and other provisions that the House added, until his chamber actually gets the bill next week.