The Journal-News obtained an email from Harris’ policy and legislative director Tim Lynch sent to Sen. George Lang on Monday addressing the issue. It says the most workable solution is one that came from Butler County Prosecutor Mike Gmoser, during a summit with county leaders a couple weeks ago. It involves changing the word “may” to “shall” in the law, taking discretion away from the tax commissioner when it comes to the data compiled for the triennial update.
The law change would force the tax commissioner to weight all three years of the considered reappraisals equally, which would bring the average value increase down to around 25%, according to the email from Lynch. When Harris send her recommended increase earlier this month she placed heavy emphasis on 2022 which produced an average 42% hike.
Lynch wrote this solution “seems to be the best route to take if we can collaborate on the language and make some tweaks to it,” but noted “This change potentially opens the door for taxpayers in prior years to challenge valuations on a basis that a uniform process was not used in calculating values for all 88 counties.”
Local leaders have been irate over the increase because current economic conditions prompted by the coronavirus pandemic — like grossly inflated home sales — weren’t taken into account. Lang filed an amendment to the new state budget bill on Wednesday that changes the law, because “I want to take the decision totally away from her.”
Lang sent the Journal-News the amendment after it was filed — he said they did consult with Harris’ office on the language — and it says in part:
“In conducting such studies, the commissioner shall not give more weight to sales occurring in any particular year during that three-year period. The commissioner shall confirm the sales data with data collected by county auditors. If the number of arms’ length sales for a like use within a class of property in a county during that three-year period does not equal at least five percent of the total number of properties in the county within that class, the commissioner may also require that the county auditor conduct appraisals of real property in that class, which shall be a part of such studies,” the bill reads. “The commissioner shall use such studies and other information including current economic conditions, in the equalization of a class or classes of real property.”
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.
Commissioner Don Dixon, who spearheaded the crusade to get lawmakers to intercede said “anytime it goes from 42% to 24% that’s a win.”
“It’ll make it a lot easier financial burden on our taxpayers for next year,” Dixon said. “We’re still looking for longer term solutions but this is the quickest, best solution at this point.”
The highest recommended triennial hike is 43% in Clermont County just east of here, and Butler County came in second with 42%. Montgomery County to the north was informed their values for residential properties should go up 37% — and commercial by 13%.
Of the 13 recommended increases three were in the 40% range, eight in the 30% range, two around 20%.
Lang said, “there’s a lot of passion in my caucus to get this fixed.”
“I feel real good about it, most of the senators in my caucus were not aware of it until I brought it up last week, because it’s only affecting a handful of counties right now,” Lang said. “But within the next three years every single county in Ohio will be impacted.”
Neighboring Warren County went through the triennial update in 2021 and had an average 17% increase, according to Auditor Matt Nolan. Their sexennial reappraisal is next year.
The other solutions the lawmakers floated included effectively freezing the property values at the 2020 levels via a tax credit for this year. They suggested freezing the values for all 41 counties going through value adjustments — both the sexennial and triennial adjustments — or just the 13 counties undergoing the triennial update.
Lynch said there are constitutional issues with both of those ideas because “a uniform process was not used in calculating values for all 88 counties.”
State representatives Rodney Creech and Thomas Hall along with Clermont County Sen. Terry Johnson were in the meeting with Harris last week. Hall told the Journal-News since the House budget has already been submitted. He is also working on legislation that will mirror Lang’s amendment, to ensure smooth passage through the legislative process.
“We want to have hearings on it, that way people know what they’re voting on whenever it comes back,” Hall said. “Because that will be a change from the House version and the governor’s versions.”
Gov. Mike DeWine has the final say, and the Journal-News reached out to his office. Press Secretary Dan Tierney said the legislators have shared several proposals with them and they are reviewing them “to determine potential statewide impact.” Late last week he was more specific.
“While changing the weighted average might help taxpayers in red hot counties like Butler County, we need to look at if it would raise taxes on other Ohioans in other counties in different situations, and if it would harm taxpayers during a different market, such as an economic downturn,” Tierney said.
Usually value hikes don’t automatically trigger tax increases to the same degree, but county Auditor Nancy Nix said recently “we’re sounding the alarm” because only two of the school districts — the schools collect 55% to 72% of property taxes — Fairfield and Lakota haven’t hit the 20-mill floor.
“The only thing we can say for sure is Lakota and Fairfield are the only school districts not at the 20-mill floor,” Nix said. “All the other 8 of 10 districts are at the 20-mill floor, meaning their taxes will by and large go up proportionately with their valuation increases. Which has not been the case in the past before this heavy inflation set in.”
All of the county and statehouse leaders say the budget bill amendment is just a first step in getting taxpayers relief. Addressing the 20-mill floor, revisiting a tax rollback that was erased in 2013 and adjusting the Homestead Act are a few long-term solutions.
“There’s a whole lot of things we can still look at but what we need right now is a band-aid to stop the bleeding,” Lang said. “All the other measures are going to be a fairly big lift and even this one I’m sure is going to have some opposition from some of the big urban cities and school districts.”
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