The county auditors association, after coming up with its own ideas on attacking the tax rather than the value, said it prefers a cap on the amount of increased revenue that can come from 20-mill floor school levies to no more than the annual inflation rate.
Failing that, Warren County Auditor Matt Nolan, who has been speaking for the association, suggested the state could use some of its rainy day fund or American Rescue Plan Act dollars to give taxpayers either property or income tax breaks.
“The state could give tax relief tomorrow,” Nolan told the Journal-News. “They’ve got a lot of money, if they wanted to do that they could do that tomorrow, but I don’t know what the appetite is for that.”
According to Pete LuPiba, communications director for the Ohio Office of Budget and Management, the state has $3.65 billion in the budget stabilization or “rainy day” fund, but it “is a reserve set aside during good economic times to solely protect the state’s operating budget from cyclical changes in revenues and expenditures which may occur during economic downturns.”
As for federal pandemic relief funds, there is a cash balance of $2.7 billion however, “this amount has been fully allocated in accordance with appropriations made by the General Assembly.” Butler County Auditor Nancy Nix calculated the impact of the enormous property value increases — Butler is the 7th largest county in the state — would amount to around $41 million.
No one has calculated how much would be needed to give taxpayers a break in terms of property or income tax, but Butler County Nancy Nix has asked all taxing bodies countywide to forgo windfalls from the value explosion. They calculated the tax break would amount to roughly $41 million if entities collected the same revenues as this year.
She noted the amount will undoubtedly be higher, but until they have their values set and can calculate the taxes, the true amount is “unknowable.”
Gov. Mike DeWine’s Press Secretary Dan Tierney reiterated to the Journal-News the purpose of the rainy day fund.
“While I don’t disagree with some people’s sentiments an unexpected increase in property tax is a rainy day, it’s not the rainy day that this fund was statutorily established for,” Tierney said. “Additionally it’s been this administration’s philosophy to use one-time funds on one-time expenditures, so using the rainy day fund for something that might have an ongoing expense, it’s not fiscally conservative, it’s not fiscally a smart thing to do.”
Tierney said this is certainly not the first time people have suggested the state dip into the rainy day fund, “everybody wants to spend the rainy day fund on their rainy.”
“If every bill was passed that wanted to spend money from the rainy day fund, this fund would have been spent several times over and there would be no money,” Tierney said.
The Journal-News asked if there were other funding sources that could be tapped. Tierney said the timing isn’t ideal since the budgets have already been set for the next two years. He said any money siphoned off one fund has repercussions elsewhere.
“If the game is people spit-balling well is there money in this fund or is there money in that fund, it may be one way to do it, but the money’s got to come from somewhere...,” Tierney said. “I assume everybody’s goal here is to provide tax relief with having the least impact on other areas and needs of the taxpayers as well, in this case the services that local governments provide, or the services that any state subsidy you’re taking the money from would have otherwise funded.”
House Majority Floor Leader Rep. Bill Seitz told the Journal-News “the answer to that is no” when asked about a potential state subsidy.
“We’re not going to use state resources to buy down property taxes,” Seitz said. “We used to do that, we used to pay 12.5% of everybody’s property taxes for them and about ten years ago we eliminated that because it was costing a huge amount of money.”
He noted the legislature already gave taxpayers “huge” income and commercial activity tax cuts and other big benefits in the budget that passed in June, “we have not been ungenerous this year.”
He said the adjustment to the 20-mill floor “has some appeal” but HB 187 — and its twin SB 153 — in it’s current form would cause too many problems, such as undoing work auditors have already done in 41 counties under reappraisals this year, and delaying revenues local entities rely on to operate.
Ohio law provides a minimum millage level for school districts, or floor, that rates cannot fall below. Once a district’s total current expense millage is reduced to 20 mills, it cannot be reduced any further, so tax revenues grow as property values increase.
Sen. George Lang authored SB 153 and he is furious the county auditors have all but doomed their efforts to gain temporary tax relief for property owners. He said they lobbied hard to get the measure pulled from the state budget and are still calling state representatives and telling them not to pass the bill.
“If there is any clunky-ness to this at all, it is 100% the auditors’ fault and it is disingenuous for them to say now that this is going to potentially cause a problem,” Lang said. “Because it’s their fault.”
A House session is scheduled for Wednesday, but Rep. Sara Carruthers said they won’t know until that morning if they are voting on HB 187 or not. There won’t be another session until after the November election and it would definitely be too late for county auditors and the state to actually enact change.
“If 187 isn’t on the agenda next week, if the auditors’ association is successful at stopping it again, we will not have tax relief for our taxpayers in time to be effective before the (tax) bills go out,” Lang said.
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