Governor Mike DeWine speaks at the event. (Photo: Nick Evans, Ohio Capital Journal.)
Ohio Governor Mike DeWine has some decisions to make regarding property tax reform. State lawmakers have signed five proposals into law in recent weeks and now they head to DeWine’s desk.
While the governor expressed concern about rising property taxes, he rejected previous legislative proposals that ended up in the state budget.
Lawmakers initially promised to override several of those vetoes, but backed down after overriding just one, which banned certain types of fees, including in-lieu and emergency fees.
Instead, Republican lawmakers in the House launched a property tax blitzkrieg of sorts, led largely by former Ashtabula County Auditor, state Rep. David Thomas, R-Jefferson.
Thomas is the lead sponsor of all five bills lawmakers sent to DeWine.
The proposals authorize county officials to reduce fees previously approved by voters, create more room for tax cuts, limit tax increases to inflation and shift the burden of proof in assessment disputes.
Last week in the Ohio Senate, another former Ashtabula County auditor, state Sen. Sandra O’Brien, R-Ashtabula, boiled it down to a plain equation.
“Our taxpayers that we represent want property tax relief,” she said. “The bills we will be voting on bring them this relief.”
Ohio’s governor, lawmakers and grassroots organizers are at odds over property tax reform
She reminded lawmakers that there is little margin for error as grassroots organizers across the state collect signatures for a resolution eliminating property taxes.
“This scenario, if successful, will put Ohio on the brink,” O’Brien said. “Today we have a chance to show Ohio taxpayers that we hear their calls for property tax relief.”
Speaking at Friday’s event, DeWine pointed to the property tax working group he created after vetoing lawmakers’ budget proposals.
He explained that the group was tasked with “coming up with solutions where there are no great solutions, quite frankly, no matter what we do.”
The working group had to balance funding for local services such as schools with the costs of homeowners struggling to make ends meet.
DeWine admitted he didn’t like all the compromises that had been reached, but insisted the group had done a very good job.
“So I’ll evaluate these bills based on what the committee comes up with,” he said, “and we’ll have some comments on that in a few days.”
Compare bills with recommendations
Ohio House Bills 186 and 335 collectively limit property tax increases to the general rate of inflation.
The state constitution gives local governments the authority to collect up to 10 mills (or 1%) of property taxes without prior voter approval.
This constitutionally guaranteed amount is called an internal levy, while any additional taxes approved by vote are called external levies.
Ohio House Bill 186 addresses external fees and Ohio House Bill 335 addresses internal fees.
DeWine’s working group clearly supported the former and encouraged lawmakers to apply the same inflation cap to domestic revenues.
Here is the position of the Ohio House of Representatives property tax reform bills in the Ohio Senate
Ohio has a tax abatement system that lowers homeowners’ rates to keep their tax rates stable for decades. But there is an significant limitation. The total amount of school fees cannot fall below 20 million.
Ohio House Bill 129 includes additional taxes in the 20-mill floor calculation.
In particular, substitute and extraordinary fees that legislators banned in the future did not previously count towards the floor.
The working group suggested that they should also be changed to fixed sum fees. AND
importantly, members called on lawmakers to maintain a 12.5% state share of funding if these taxes are renewed.
Without it, so-called “phasing out” districts would receive less money for the same fee. In total, the difference would be about $96 million.
Lawmakers agreed to keep the phaseout in place, but the House version allowed only one renewal of expiring fees.
Critics warned it would delay rather than solve the problem. The Senate passed an amendment allowing continuous renewal.
Ohio House Bill 309 allows a county budget committee, which includes the local auditor, treasurer and attorney, to reduce ballot fees they deem unnecessary or excessive.
DeWine’s veto message said it “violates” voter approval.
His property tax working group said the commission should have the power but insisted on putting in place guardrails. They recommended a five-year secure harbor for modern fees and two years for renewals.
The group also said there should be clear definitions of the words “excessive” and “unnecessary”.
State lawmakers adopted the definitions and in the House agreed to a five-year secure harbor for modern fees.
However, renewals would qualify for immediate discounts.
In the Senate, lawmakers made further cuts – limiting protections to just one year after voter approval.
Ohio House Bill 124 gives county auditors the benefit of the doubt when it comes to property valuations.
Ohio counties complete full reassessments on six-year cycles, but update values after three years based on statistical trends.
Under current law, if state tax officials object to a county’s assessment, the auditor’s only option is to go to the Board of Tax Appeals.
Instead, the bill would require the Department of Revenue to file an appeal if it disputes an auditor’s findings.
This proposal was not part of the working group’s recommendations, but it passed through committee without any opposition.
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