Property tax working group shades capping collections to 40% of a school district’s budget
The working group looking to overhaul property taxes in Ohio reportedly opposes the idea of capping the property tax collected at 40% of a school district’s operating budget.
According to a report, any collections above that amount would be refunded to property tax owners.
“A one-size-fits-all cap probably does not really work,” former Republican lawmaker Bill Seitz, chair of the working group, told Statehouse News Bureau. “And so the task force members, I think, unanimously, do not want to see that.”
Republican Gov. Mike DeWine named the working group after he vetoed four provisions in the state’s two-year operating budget. The group, which includes a mix of elected officials, has until the end of next month to propose ideas to the governor.
Seitz indicated to the outlet that he liked the idea of House Bill 186.
“That basically says, when the rate of increase in property valuations greatly exceeds the consumer price index inflation, these districts would only get the rate of actual inflation, and not the much higher increase caused by the much higher valuations. That’s a good approach,” Seitz said per Ideastream Public Media. “A variant of that approach is to limit the rate of increase to a specified percentage, 3%, 4%. Those are all fit subjects for discussion. But I know that the leading advocates in the legislature for more property tax reform are with me in saying that House Bill 186 must pass.”
Ohio Rep. David Thomas, R-Jefferson, said the bill is “one of the most important pieces of legislation we can pass to address our property tax issue in Ohio.” However, he said the measure isn’t a silver bullet and is just one of the bills lawmakers should pass to help with property tax reform.
“The bill would ensure that the value of the school district for purposes of the tax rate calculation and formula would only increase by the inflation that happened during the revaluation cycle,” Thomas said in prepared testimony to the House Ways and Means Committee. “This ensures the legislation is constitutional and uniform and that taxpayers would not see a direct connection between their increase in value and increase in taxes,” he added.
“For purposes of the school district, the intent is to allow revenue growth, but only at what we can all agree they should receive, not more than inflation,” Thomas continued.”… It is another of the many policies needed to help taxpayers.”
However, not everyone is in favor of the proposal. The Ohio Association of School Business Officials testified against the measure, saying its analysis of the bill found it “would have serious negative consequences for public education funding while also raising significant constitutional concerns.”
“In summary, due to the system of school funding as prescribed by the Ohio Constitution and the Ohio Revised Code, schools rely on property taxes and the willingness of their voters to pass levies to maintain educational programming for students,” Katie Johnson, the association’s executive director, said in prepared testimony to the House Ways and Means Committee. “The proposed changes in HB 186 would make this task even more challenging, as property taxpayers may be less inclined to approve new levies when faced with confusing and inconsistent taxation,” she added.
“Districts will be forced to address the significant local revenue lost due to this bill, with LSC projections showing that state funding adjustments would replace only about a third of the lost revenue,” Johnson continued. “Whether directly or indirectly, HB 186’s proposed changes will negatively impact districts’ ability to raise necessary funds at the local level, which could have a devastating impact on our students, our schools, and ultimately, our communities.”
