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Property Tax Review Committee meets on back-to-back weeks

Written on May 3, 2024

Hannah News Service, Inc. contributed to this report 

As the Joint Committee on Property Tax Review and Reform looks at potential solutions to rising property taxes around the state, one witness told the committee on April 24 that decoupling property taxes from the Fair School Funding Plan "may have very bad consequences," a notion backed by Ohio school officials. 

Mike Sobul, a retired research administrator at the Ohio Department of Taxation, and the chief financial officer and treasurer at Granville Exempted Village Schools, gave the committee an overview of property taxes and what the Ohio Constitution and case law allows the state and local entities to do and not do when it comes to implementing them. 

Summing it up, he told the committee that the Ohio Constitution has been very restrictive of what can and can't be done with property taxes, and case law has supported that. He also said there are some issues that have never been litigated and would need to be if they ever came about. 

Discussing the school funding formula developed by former Speaker Bob Cupp and Rep. John Patterson, known as the Cupp-Patterson formula or the "Fair School Funding Plan," Sobul said the plan was designed to work with property taxes, and there would be drawbacks to decoupling them. He said an important point is that whatever lawmakers do, the school funding system recognizes what they are doing and moves in the same way with what is done. 

Sobul was followed by a panel of school officials representing the Ohio Association of School Business Officials (OASBO) and the Buckeye Association of School Administrators (BASA). They included Mayfield City School District Superintendent Michael Barnes, Northmont City School District Superintendent Tony Thomas and Treasurer Ann Ferraro, Athens City School District Superintendent Matt Bunting, Johnstown-Monroe Local School District Superintendent Philip Wagner, and Sycamore Community School District Treasurer Jenni Logan. 

The school officials echoed many of Sobul's sentiments, especially regarding property taxes and ties to the Fair School Funding Plan, saying any significant changes to the property tax system could break that relationship and cause the Fair School Funding Plan to fail. 

On May 1, Ohio Township Association (OTA) Executive Director Heidi Fought said the passage rate for township levies has fallen during the last two election cycles as the General Assembly considers eliminating replacement property tax levies. The House Ways & Means Committee on April 30 reported out H.B. 344 (Mathews-Hall), which would eliminate replacement property tax levies. 

“The reduction in levies' passage rates alarms us. It is critical that townships have all three types of levies -- renewal, replacement and additional -- to provide residents with options that best suit the individual township. The OTA encourages the General Assembly to retain all three levy types for township usage,” Fought told the Joint Committee on Property Tax Review and Reform. 

According to Fought’s testimony, renewal levies had a 96.6 percent passage rate in May 2023, a 97.9 percent passage rate in November 2023 and a 90.3 percent passage rate in March 2024. Replacement levies had a 92.8 percent passage rate in May 2023, an 89 percent passage rate in November 2023 and a 70 percent passage rate in March 2024. Additional levies had a 65.6 percent passage rate in May 2023, a 46 percent passage rate in November 2023 and a 40.9 percent passage rate in March 2024. 

Fought said the enactment of 134–H.B. 140 (Merrin) likely played a key role in the lower passage rates in November 2023 and March 2024. 

Also providing testimony on May 1 were three representatives of the County Commissioners Association of Ohio (CCAO) – Union County Commissioner Dave Burke, Shelby County Commissioner Tony Bornhorst and Logan County Commissioner Mike Yoder. 

Burke said he is concerned about the increased use of tax increment financing (TIF) for economic development purposes. 

The committee also received testimony from Larry Heiser, finance director for the city of Beachwood, representing the Ohio Municipal League; Keary McCarthy, executive director of the Ohio Mayors Alliance; and Jon Honeck, senior policy analyst with CCAO. 

All of the previous testimony from the Joint Committee on Property Tax Review and Reform can be watched on the Ohio Channel here. The committee must issue a report by the end of the year. If you missed it last week, the Senate Select Committee on Housing issued its report on April 24. 

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