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Committee begins work on property tax recommendations

Written on Jan 19, 2024

Hannah News Report 

The newly formed Joint Committee on Property Tax Review and Reform met for the first time on Jan. 10 to learn more about the current state of property taxation in Ohio. The committee was created as a part of HB33 (Edwards) to make recommendations on pending legislation related to property taxation.  

The committee is co-chaired by Sen. Louis Blessing (R-Cincinnati) and Rep. Bill Roemer (R-Richfield), and Rep. Dan Troy (D-Willowick) is ranking member. Additional committee members include Sen. Bill DeMora (D-Columbus), Sen. Sandra O’Brien (R-Rome), Sen. George Lang (R-West Chester), Sen. Herschel Craig (D-Columbus), Rep. Bride Rose Sweeney (D-Cleveland), Rep. Tracy Richardson (R-Marysville) and Rep. Tom Young (R-Dayton). 

Roemer said the committee reflects the importance of property tax to everyone who lives in Ohio, but conceded “There’s probably only two people in the state of Ohio who understand property taxes, and they disagree.” 

In separate but complementary testimony, Sam Benham of the Legislative Service Commission (LSC) and Matt Chafin from the Ohio Department of Taxation delved into what Benham described as the tapestry that makes up Ohio’s property taxation rules and regulations. 

Benham, division chief of taxation and economic development in LSC’s Office of Research and Drafting, said that property taxes are Ohio’s oldest taxes and have been codified into the Ohio Constitution since 1851. Since then, county governments have been mainly responsible for appraising properties and formulating property tax rates based on factors including land value, local levies, school levies, various tax reductions and even an attempt by the General Assembly in 1976 to lay out how property taxes are calculated with legislation in the form of HB920. 

Young said he looks at the committee as a chance to end the “band-aid approach” to fixing property taxes that the state has been doing since the 1800s. “It’s not a beautiful tapestry,” said Young. 

Sweeney took issue with funding for schools being based on property taxes, pointing out that the subdivisions upon which property tax millage is based were drawn up between 1929 and 1933. Sweeney asked if the committee should be looking at updating a system devised nearly 100 years ago. Benham pointed out that when those subdivisions were formed then, it made sense because the millage limit on property taxes had been set from 1.5% to 1%. While school district boundaries have changed since then, differences can be made up with free millage on the county level, which can be allocated by local officials at will. 

Blessing brought up the current shortage of housing in Ohio, saying the state has not been building enough. He added that a lot of the tax credits used to spur housing construction are then “of dubious value.” Blessing also asked if the valuations given to properties by appraisers are actually higher than a property’s actual value, and if tax exemptions are accounted for in funding schools. 

After Chafin detailed the ways the Ohio Department of Taxation reconciles the state’s tax districts, tax appraisal methods, and various forms of tax exemption, Young asked about companies that receive tax abatements to move into an area, then leave before the agreed duration of that abatement. He asked if there was any way to recoup what was lost in taxes as a clawback. Chafin said there is potential for that to happen, but the state does not track money lost in that manner county-by-county. 

Craig asked Chafin if he could speak to the shifting sources of revenue for the state of Ohio, in light of lowering income taxes among residents. Chafin said that was beyond what he came to Wednesday’s hearing prepared to discuss. 

The committee is required by HB33 (Edwards) to submit a report to the General Assembly by Tuesday, Dec. 31, making recommendations on property tax law, but other organizations are already submitting approaches to the issue. 

At the next committee meeting on Jan. 24, they will hear testimony from the County Auditors’ Association of Ohio and the Ohio Board of Tax Appeals.  

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