No half-measures on property tax reform

Ohio is experiencing a property tax crisis. A crisis driven by unvoted increases in property taxes as property values are rising. A crisis so severe that a group of taxpayers has formed seeking the complete elimination of property taxes in the State of Ohio. About 50 years ago, Ohio was also experiencing a property tax crisis. To address that crisis the legislature came up with something truly bold and innovative, House Bill 920. At its heart, House Bill 920 was a promise to taxpayers that their property taxes on voted levies wouldn't increase as their property values rose. However, the protections afforded by House Bill 920 have been significantly eroded by the operation of the 20 Mill Floor for school districts (as well as the 2 Mill Floor for Joint Vocational School Districts (JVSs) and the deliberate actions of many, many districts. The Floor adjustments along with increases on inside millage together account the unvoted property tax increases that have frustrated and angry taxpayers ready to take things into their own hands at the ballot box. In Ottawa County, we have two school districts that would have needed to request around 7.0 mills from voters to equal the unvoted windfalls they will be receiving due to their 20 Mill Floor adjustments and the gains on their inside millage because of the reappraisal for Tax Year 2024. It is little wonder that our taxpayers are frustrated and angry. Around 85% of one district's unvoted windfall was due to their 20 Mill Floor adjustment and around 74% of the other district's unvoted windfall was due to their 20 Mill Floor adjustment. I believe in most cases, by far the largest percentage of unvoted tax increases that folks are seeing around the State are coming from Floor adjustments for their school districts (and JVSs). Therefore, if we are to protect property tax payers from the largest source of unvoted tax increases going forward, the 20 Mill Floor for school districts (and 2 Mill Floor for JVSs) must be eliminated. Yes, elimination of the Floors will cause issues with the current school funding formula. Given the circumstances, a reasonable proposal would be to freeze school district formula funding for Fiscal Year 2026 at Fiscal Year 2025 levels until changes to the funding formula could be made that take into account the elimination of the Floors. It should be remembered that many, many school districts have reaped huge unvoted windfalls at the expense of their taxpayers over the past few years. I believe the unvoted property tax increases that are occurring on inside millage could largely be addressed with changes to the Homestead and Owner Occupancy credits. I'm aware that both the House and Senate versions of the budget make changes to the Homestead credit that will provide some relief for those that qualify for the program. However, to provide immediate relief to many more taxpayers, the Owner Occupancy credit needs to be addressed as well. A significantly expanded fixed dollar Owner Occupancy credit scaled to inflation would provide relief to a vastly larger number of taxpayers. Yes, expanding the Owner Occupancy credit will require additional State funding. I suggest that it is vastly more important at this moment to provide some immediate property tax relief than it is to make changes to the State's current Income Tax structure. Another potential source of funds would be diverting scheduled formula increases in school funding for FY26 into funding expanded property tax credits. Again, it should be remembered that many, many school districts have reaped huge unvoted windfalls at the expense of their taxpayers over the past few years. I believe the County Budget Commission changes contained in both versions of the State budget will be very helpful to Budget Commissions throughout the State going forward. As you know, we already have a very complex property tax system. It would be regrettable to see more complexity added when the straightforward solution to the largest percentage of unvoted property tax increases is available via elimination of the Floors. This is not the time for gimmicks and half-measures. Be truly bold on behalf of taxpayers, focus on the main source of the problem. Restore the promise of House Bill 920 by eliminating the 20 Mill Floor for school districts (and the 2 Mill Floor for Joint Vocational School Districts). Failure now could well lead to a voter-imposed property tax catastrophe either later this year or next year. Tony Hatmaker Ottawa County treasurer