Is Property Tax Relief on the Horizon? The General Assembly sends four bills to Governor DeWine.

Providing relief for rising property taxes has been top of mind in the General Assembly this past year. Two weeks ago, the legislature passed four bills meant to tackle this issue. The bills, which each take different approaches to lowering property taxes, are now awaiting consideration by Governor DeWine.  But how would each bill address property taxes?

House Bill 129—School District Millage

House Bill 129, available here, was introduced by Representative David Thomas (R, Jefferson). In Ohio, we collect property taxes in units of measure called “mills.”  Each mill is equivalent to one-tenth of a cent. In the late 1970s, the Ohio General Assembly passed the “20 mill floor” for school districts, which was meant to guarantee districts a baseline of funding.

However, under current law, not all school district levies count toward the 20-mill floor, which can result in higher property taxes. H.B. 129 would change this by including emergency, substitute, incremental growth, conversion levies, and the property tax portion of combined levies when calculating the 20-mill floor for school districts.  The thought is that including more types of levies in the 20-mill floor will reduce property tax rates in school districts with these additional levies. For some more background on school districts and the 20-mill floor, Ohio’s Legislative Service Commission (LSC) has a brief on the subject, available here.

House Bill 186—School District Revenue

House Bill 186, sponsored by Representatives James Hoops (R, Napoleon) and David Thomas (R, Jefferson) also focuses on the 20-mill floor for school districts. The bill, available here, would create a tax credit which would prevent increases in school district property taxes from exceeding the rate of inflation. This would only apply to property owners in a school district on the 20-mill floor. LSC’s analysis of the bill, available here, includes helpful examples of how the tax credit would work.

H.B. 186 also modifies property tax “rollbacks” for residential property, which would ultimately increase the total rollback, or savings, for owner-occupied homes, while eliminating the rollbacks for all other residential property.

House Bill 309—County Budget Commissions

House Bill 309 takes a slightly different approach to lowering property taxes by revising the authority and rules for county budget commissions. Sponsored by Representative David Thomas (R, Jefferson), the bill’s text is available here. 

County budget commissions are made up of the auditor, treasurer, and either the prosecuting attorney or tax commissioner in each county. If passed, H.B. 309 would allow county budget commissions to reduce millage on any voter-approved levy if the commission deems the revenue is “unnecessary” or “excessive.” This authority to reduce millage on levies would not include debt levies. Further, county budget commissions would not be permitted to reduce a school district’s operating levy below the 20-mill floor, or to reduce any levy collected below the previous year’s revenue unless they are able to offset the reduction using reserve balances, nonexpendable trust funds, or carryover amounts. 

House Bill 335—Property Tax Overhaul

Finally, House Bill 335 was also introduced by Representative David Thomas (R, Jefferson).  H.B. 335, available here, would limit inside millage collections to the rate of inflation. This would be accomplished by requiring county budget commissions to adjust the rate of each inside millage levy during the reappraisal of all real property performed every six years under Ohio law, or during the update, which occurs every three years.  To see some examples of this language in action, see the LSC’s analysis of the bill, available here. 

What’s next?

Each of these four bills aimed at lessening the burden of property taxes have been delivered to Governor DeWine, and await his signature before they can become law.  We will certainly keep you updated on what happens with each bill. In the meantime, if you’d like more information about property taxes in Ohio, the Ohio Department of Taxation has a great informational guide here.