Property Tax Workgroup hones deferral proposal, talks government reforms

Hannah News contributed to this report

Gov. Mike DeWine’s property tax reform study group met Sept. 4 to weigh local government reforms to inhibit property tax growth, including giving county commissioners gatekeeping powers over ballot access. 

Chris Galloway, Lake County auditor, circulated a memo among group members in advance of the meeting and discussed a few of the ideas during the meeting. 

One of his proposals is to allow boards of county commissioners discretion on whether to place levy proposals from un-elected boards under their purview, such as the alcohol, drug addiction and mental health board or board of developmental disabilities, on the ballot. 

Galloway also floated ideas to somehow pause implementation of the next valuation cycle to give lawmakers more time to work out property tax reforms and to convert the terminology of property taxes from millages to simple percentages. 

Ohio Business Roundtable CEO Pat Tiberi, the co-chair of the group, asked if the millage-to-percentage conversion would require a constitutional change. Galloway said doing away with millage entirely would require that, but changing the terminology used in ballot language may not. 

Members also reached general agreement on a set of parameters for a potential tax deferral program so that the Ohio Department of Taxation (ODT) can produce cost estimates. A deferral program would allow certain people to forego paying a portion of their property taxes, and the government would recoup that amount either upon their death or the sale of their home. 

Former legislator Bill Seitz, the other co-chair of the group, led the body through several parameters, resulting in an outline for ODT to consider in its estimates that includes an age requirement of 65; income threshold the same as used for the homestead exemption; a requirement to live in the house at least five years; and use of liens to collect the eventual tax bill. 

Workgroup members debated whether it would be necessary to require homeowners to demonstrate a certain amount of equity in the home or to re-certify their eligibility annually. County officials who serve on the panel said both would be administratively difficult. 

Warren County Auditor Matt Nolan suggested the deferral program’s costs would resemble that of House Bill 156 (T. Hall-Isaacsohn), which would freeze taxes for homeowners over age 65 who’ve been in their homes at least two years, earn less than $50,000 a year and are in a house worth less than $500,000. That has a price tag over $200 million, Nolan said. 

Galloway also raised an objection he lodged at the prior meeting, asking whether the size of the liens for deferred property taxes would cause lenders to withdraw certain products like home equity lines of credit or reverse mortgages from the state for fear they’d be stuck in line behind the tax liens when it’s time to collect. 

Tiberi said that at the next meeting he would like to discuss the concept in Senate Bill 42 (Reynolds-Craig), which would allow local governments to create “residential stability zones.” 

The workgroup has a reporting deadline of Tuesday, Sept. 30.