The law change would force the tax commissioner to weight all three years of the reappraisal equally, which would bring the average 42% value increase down to around 25%. It also gives considerable more power to county auditors, who are the ones in the trenches and know first-hand what is going on in their communities.
Lang told the summit attendees the steps he took to get the amendment accomplished — he’ll know if his colleagues will approve it June 6 — and thanked Gmoser for the idea. Prior to the meeting, he told the Journal-News he would like to tweak the proposed law change further.
“What I would ultimately like to do is to say they shall do the three-year weighted average or the most recent year, whichever is the most advantageous for the taxpayer,” Lang said. “I know that’s going to be very difficult to get done in the budget because that’s a big move and we’re going to have a lot of gnashing of the teeth.”
Properties statewide are reappraised every six years, and property values are updated every third year based on sales data and the shifts are reflected on tax bills the following the year. The auditor’s office is in the process of the triennial update.
He mentioned the possible amendment to the group, and they all urged him and State Rep. Thomas Hall to push it through.
Commissioner Don Dixon, who spearheaded this “call to action” said if they can get the new language in the budget, “I would bet a farm that this language that you put in that bill will carry the most benefit to the taxpayers than probably has ever been put in a bill, that is huge.”
Hall and Rep. Adam Bird, R-New Richmond, introduced the Ohio Homeowners Relief Act last week, a stand-along bill that mirrors Lang’s budget amendment. Hall told the group the purpose of his bill —in addition to giving his colleagues a heads up about the budget amendment — is to work the kinks out.
“The budget will come back to the House towards the middle to the end of the month for a conference committee,” Hall said. “We want to make sure as Sen. Lang talked about, that all of the issues, the unintended consequences get addressed.”
Hall told the Journal-News he intends to add Lang’s new language to his bill.
Some have already expressed concern the three-year mandate could backfire if the housing market tanks. For example, if a county had two years of 10% value increases and then a big drop in the third year, Greene County Auditor David Graham told the Journal-News “people are going to have an increased value during a decline in the market, that’s going to be really tough to explain to taxpayers.”
However, House Majority Floor Leader Rep. Bill Seitz told the Journal-News previously he will object if they try to keep changing it as the economy ebbs and flows.
“If you want a three-year average that’s a smoothing out process, that’s fine but you have to stick with it,” Seitz said. “We’re not just going to play heads I win tails you lose. Because ultimately the townships and the cities and schools and the special levies all need money. They don’t exist in a vacuum.”
County Auditor Nancy Nix noted Seitz’s remarks and also said House Speaker Jason Stephens opposes the move so “I don’t know that’s even possible”, but urged the lawmakers to try.
“What we’re doing is letting the taxpayers be in the driver’s seat for once instead of these special interests,” Nix said. “I can’t begin to tell you how important that part is, because if you’re going to tie our hands for an average of three years and the real estate market collapses — which some people say will never happen, but it did and it could again very easily — I hate to see our hands tied, that’s why that is so, so important, I beg you to get that done.”
The group also discussed the fact agricultural properties are leaping to 110% in Butler County. Unlike residential properties, which are based on fair market value, the Current Agricultural Use Value (CAUV) values are based “on a study of seven years of crop income and expense data with the highest year and lowest year being dropped from the analysis.”
Rep. Rodney Creech, who is a farmer from Preble County and represents a sliver of Butler County, said he has been in discussions with the Farm Bureau — he said that agency recently also had a meeting with the state tax department on the issue — and they are discussing capping rates for a year.
He said there is a bigger issue that needs to be addressed: Local governments from the state on down need to “tighten their belts” because “our residents need it more than governments.”
“Local government has been very fortunate in the last few years with the sales tax, a lot of good things have happened, unfortunately federal money has been flowing in and sometimes if we have it we spend it,” Creech said. “I think right now it’s the best time for us to tighten our belts, and I’m talking about the state, we’re the worst offender. So I’m not going to say (just) townships, municipalities, local governments.”
Rep. Jennifer Gross agreed and said, “at the state level we must tighten our budget, we must tighten our belts, we must not increase.”
Aside from that, she said, they need to dig in and delve into some of Nix’s other ideas, particularly concerns about the 20-mill floor — namely school funding. When a school district reaches the 20-mill floor, the millage will not decrease any further, which causes a school district to collect additional funding as values increase.
“One of those I’m really on, and I know the schools won’t like this — and maybe not the commissioners — but the 20 mill-floor transparency must be something that we address,” Gross said. “The taxpayer needs to see at every turn how much they’re paying. Once we’re done with this, maybe we don’t need to have a bunch of media, and together, I think we need to look at this for a long-term fix.”
Nix told the group they also need to address the plethora of tax incentives, such as tax increment financing districts (TIF) and residential improvement districts (RID). She said communities use these vehicles that siphon money away from providing government services, which prompts new levies. She said 80 new levies have been approved since 2008.
County Administrator Judi Boyko said these incentives “aren’t a bad thing when applied responsibly with accountability.” She said there are other unique options to consider.
“I think as you constrain the ability for these political subdivisions or entities to enact levies, perhaps look at also the ability to consolidate or coordinate services,” Boyko said. “Because with so many school districts, so many fire departments, so many police departments, is there a way the consolidation of services can also be enhanced.”
Dixon told the group they plan to meet again in about six months when they can take a deeper dive into all of the taxpayer relief solutions.
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