Rep. Thomas Hall introduced his Ohio Homeowners Relief Act at the end of May and it has had four hearings in the House Ways and Means Committee. He introduced amendments last week to include agricultural properties and a three-year sunset clause that gives the legislature time to implement comprehensive tax reform. The amendments were approved but the measure wasn’t passed out of committee.
Hall told the Journal-News another amendment is in the works and it will be introduced Tuesday.
Sen. George Lang tried and failed to insert these provisions in the budget bill, and this week introduced his own bill — that mirrors Hall’s — in the Senate, and it has been referred to Ways & Means in that chamber.
Once out of committee, HB 187 would go to the full floor but the first official session isn’t scheduled until Oct. 18. There are two “if needed” sessions on the House calendar for Sept. 27 and Oct. 11.
House Speaker Jason Stephens, a former county auditor, told the Journal-News he is committed to finding a solution and they plan to have a floor vote this fall.
“We’ve seen this problem coming, and during inflationary times it’s not sustainable to have 30 and 40% increases every three years in our property values and our property taxes,” he said. “So we’re going to keep working on it to keep that from happening.”
Lang said he believes he has full senate support for the measure, but they might need to do an “emergency clause” so the legislation takes effect immediately, rather than the normal three-month waiting period after the governor signs a bill. That requires a two-thirds vote to pass.
“Assuming it gets passed I’m told the House will not fight it this time like they did in the budget,” he said. “But I’m not convinced, I’ll believe it when I see it. I don’t know if we have enough votes for an emergency clause in the House I think we certainly do in the Senate. There are still a lot of moving pieces.”
There are naysayers
During the House Ways and Means Committee meeting Rep. Daniel Troy, D-Willowick has had misgivings about this legislation throughout the process.
“We need a comprehensive total review of the property taxes instead of doing these things piecemeal here and there,” he said. “Because there are ramifications and there are reverse reactions that take place by a lot of these things.”
He asked Hall if the sunset amendment was meant to “appease” the county auditors — who have opposed the legislation — because he said “they have not been appeased.”
Hall and Lang have said all along — hence the three-year sunset of their bills — this is just a “band-aid to stop the bleeding next year.”
“They haven’t officially given me the green light, the red light or anything like that. We have had a lot of conversations with the county auditors; we’ll continue to work with them on long term solutions,” Hall said. “This is something we can do right now to help the taxpayers in the meantime.”
Anne Harkin, a spokeswoman for the Ohio Department of Taxation, said the legislature may enact changes this year to lower the bills next year, but it’ll be difficult.
“Making such changes poses significant administrative challenges for county auditors and the Ohio Department of Taxation,” she said. “Enacting wholesale changes of this nature late in the calendar year would require the restart of a significant calculation and review process and necessitate that this work be done in a matter of weeks. This could create delays in 2024 property tax collections.”
What about the governor’s opinion?
If the two chambers of the legislature can get the measure passed, Ohio Gov. Mike DeWine still must sign the bill into law. Press Secretary Dan Tierney told the Journal-News while they haven’t taken an official stance, they have voiced several concerns that hopefully will be addressed during the legislative process.
He said the three-year lookback will benefit some people in the short term, but if the economy tanks and values really tumble “you’re going to keep the higher property value in the formula longer than the current system.”
Tierney said there is also concern for the taxing bodies who rely on property taxes to run their operations and consistency is important not only to them, but the taxpayers as well.
“What we’ve heard consistently is we want a consistent system that we can project year-to-year what the impacts will be,” he said.
“A big part of it is you want consistency and if you’re changing every time there’s a change in the market, that does not provide consistency that will help attract jobs and people moving to Ohio. That would be a concern,” Tierney said. “The approach that people want to take is, well, this system works now we’ll change it back when the market changes. You don’t want to just blow with the winds in this type of situation.”
Properties statewide are reappraised every six years — a much more detailed process that examines every property countywide — 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 Butler County auditor’s office is in the process of the triennial update.
Passage would be a nightmare for auditors
Montgomery County is also undergoing an update and County Auditor Karl Keith said the average residential increase is 34% and commercial 12%, for an overall 30% increase. The residential range is 17% in Jefferson Twp. to 48% in Perry Twp. Some properties declined in value and one neighborhood saw a 70% value hike.
He has already mailed out 165,000 notices to property owners with their new values, done about 4,000 informal reviews with taxpayers and held dozens of forums. He vehemently opposes the proposed legislation that would require them to undo work already done.
“I just think it’s a bad idea and totally irresponsible on the part of the legislature to try to implement a change to this year’s updates given where we are in the process...,” Keith said. “Could it be done, it could possibly be done, I think it would mean we would be rushed and I think we run the risk of doing some really sloppy work between both the counties and the state, and with sloppy results. We’ve just gone too far in this process.”
If the legislation fails or can’t be accomplished in time, there has been some talk about tax rebates for the 41 counties undergoing the value changes this year that impact tax bills next year. But that presents a whole other issue of equal treatment.
“I think fiscally it would be a low dollar amount but the complexity would be difficult,” Lang said. “It’s all uncharted territory.”
Butler County Auditor Nancy Nix sounded the alarm in March that property values were going to skyrocket due to a number of factors, many due to the ill-effect of the pandemic. At that time she estimated the values would rise by about 24%, based on early estimates from the state tax commissioner. By May, the estimated average state-mandated jump was 42%.
The final approved increase is a median 37% with a high of 41% in Monroe and low of 25% in the little sliver of Sharonville that resides in the county. County Commissioner Don Dixon issued a “call to action” and that’s when Hall, Lang and others started working on possible legislative solutions.
Dixon said he still has hope the legislation will be passed and everyone has to keep in mind what’s important, despite the headaches the last minute changes may cause.
“Who are we working for? Are we working to make it easy and convenient and not cause undo hardship for the people who work for the people who are actually paying the money in?” he said. “Where are our priorities? My priorities, I don’t care if it is difficult that all the auditors have to rework their numbers, the taxpayers are the ones paying them to do so, they need to do it for the taxpayers.
Auditor asks taxing bodies to forgo windfall
While value hikes don’t automatically translate into increased taxes, Nix said 53% of taxpayers will see 20% to 30% or more increases when the tax bills come out next year, “we see this as a crisis situation that could occur in February.”
She has acknowledged passing the legislation is probably a longshot at this point, so in the meantime — while lawmakers try to address the long-term tax issues — she has issued a challenge of sorts to the 32 taxing bodies in the county to forgo the windfall the value hikes will produce.
If everyone accepted her proposal the total savings would be $41 million. The biggest saving is $10.6 million for taxpayers in the Lakota Schools and the lowest is $8,400 in tiny Seven Mile.
As far as she knows, no one has made a decision yet. She said some have said the savings are so small per taxpayer, it might be better to use the windfall for something with a bigger impact.
“I think some government officials are incensed that we’re putting them on the spot, and I understand that,” she said. “But a lot of these taxing entities haven’t budgeted for this money and we feel it’s best to keep people’s money in their own hands instead of handing it over to the government. It might not look impactful for many, but to some it could be impactful if everyone got on board. if they can.”
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