Debate Over Property Tax Changes In The Budget

Aug 16, 2013

The new state budget includes changes for property taxes – and that will mean increases for many homeowners.

The Kasich administration is saying those changes will bring money back to the state to use for other tax cuts. But Statehouse correspondent Karen Kasler reports a Democrat says they’re a bad idea, and he’s hoping to delay them.

The budget includes means testing for the homestead tax exemption for homeowners over 65. The exemption had been expanded to all homeowners over 65 in 2007. With this budget, those who make over $30,000 won’t be eligible for the exemption. Tax commissioner Joe Testa told an audience at the Columbus Metropolitan Club that means testing makes the homestead tax exemption what it used to be.
“Much more focused on the original intent, which is of course the low income seniors.”

And the budget eliminates the 12.5% rollback the state had been paying on property taxes starting with new tax levies. Testa says most people didn’t know the state was paying that, and it’s a small benefit to homeowners at best – and one that he doubts is the only factor voters consider.
“Thirty-seven cents is the difference that it makes per mill on a $100,000 house. Do we make decisions as to whether we’re going to support our levies on that? It might be a factor, and it may be a factor in some people, I suppose.”

Budget director Tim Keen says eliminating the rollback and means-testing for the homestead tax exemption is about putting the state’s money to where it will be best used.
“The state spends $1.8 billion subsidizing the property tax bills throughout this state. Is that the appropriate place for us to allocate our resources? Our view is no and we need to take a look at that and we’ve done that.”

But Democrats are still blasting the changes as bad news for homeowners.
“Well, I think it’s a tax increase on property owners and on seniors. There’s no question about that.”

Rep. Nick Barborak is a Democrat from Lisbon in Columbiana County near Youngstown.  He’s concerned that the changes put Ohio further away from having a constitutional way to pay for public education, which the Ohio Supreme Court ordered the legislature to find after the DeRolph case.
“With the rollback, this gets us further away from DeRolph. And it places more of a burden on property taxes and local school districts than I believe are required under the Ohio Constitution.”

Barborak has proposed a bill that would delay the property tax changes till after the November election, saying school districts had to plan their fall levies before the budget was signed.  And he’s worried they will have trouble passing those new levies, since voters will know that the 12.5% rollback won’t be paid on them.
“Particularly with one school district that this affects who I’ve been in contact with and they certainly believe it will make it more difficult. They had a close levy race in the past – it failed by a few votes. To tack on this time, this certainly doesn’t help matters.”

Barborak’s bill has eight co-sponsors – all Democrats, who are deeply in the minority in the House. And lawmakers don’t return from their summer recess till after Labor Day, and the bill hasn’t been scheduled for a hearing, so there is doubt not only about whether it would pass, and if it did, whether it would pass in time.