The Republican governor used his veto power to eliminate several property tax reform measures in the $60 billion budget. They are:
- Limit school district carryover to 40% of their expenses and require excess funds be refunded to taxpayers. An estimated $2.5 billion savings to taxpayers.
- Adjusting the school district 20-mill floor calculation to include emergency, substitute and other levies and income taxes. A Legislative Services report noted school district “property tax collections may be reduced by tens of millions to over a hundred million dollars annually.”
- Giving county budget commissions the authority to “unilaterally” reduce a levy passed by voters if they determine the funding isn’t necessary.
- Eliminate replacement tax levies for all taxing bodies and curtail school districts’ ability to levy fixed sum emergency and substitute emergency levies and school district income tax and fixed-sum property tax levies.
When addressing the issue of erasing replacement and some other levies his veto message noted, “These levies serve as important tools for school districts as they seek to maintain their long-term financial stability.”
“The DeWine-Tressel Administration recognizes the great need for property tax reform in Ohio and will convene a working group that will include legislators, agency officials, school officials, community members, and property tax experts to ensure this critical topic is given the attention deserved,“ his veto message reads. ”Therefore, the veto of this item is in the public interest.”
During a press conference regarding the budget DeWine acknowledged property taxes are “the one tax I hear the most about” and the increases “have endangered the financial security of many on fixed incomes.”
He explained his line item vetoes.
“I line-item vetoed several provisions related to property taxes, I felt these ideas were thoughtful but I also was concerned that imposing them now, all of them at once, on our local schools would create a huge, huge problem,” he said. “And none of them guaranteed what we would end up with.”
After historic property value hikes hit taxpayers in many counties in 2023, the state legislature convened a special Joint Committee on Property Tax Review and Reform. The bi-partisan committee of state legislators met eight times last year, received in-person and written testimony from 60 people — experts in a wide array of topics pertaining to taxes and the services they fund — and on the New Years Eve deadline delivered an 865-page report.
It contained 21 recommendations for various ways the general assembly “should” act to address the problem. The report notes: “Given the complexities of the property tax system, these recommendations should not be considered as a comprehensive package. Some proposals may contradict others.”
Former Ashtabula County Auditor Rep. David Thomas, who was hand-picked by Republican House leadership to be the architect of property tax reform told this media outlet, “we will override this, I firmly believe we will override this, it shows what an uphill battle reform actually has.”
As for creating another study group, he said several of the items the joint committee recommended were in the budget they forwarded to DeWine.
“These were all things that were already vetted,” he said. “It’s going to be death to the property owner by 1,000 committees. It really does not make sense to me, I don’t quite see the logic.”
Sen. Bill Blessing, R-Colerain Twp., chair of the Senate Ways and Means Committee and co-chair of the joint property tax committee, told this news outlet “I’d be hard pressed to believe” another task force will have a different result than their group did.
“The Joint Committee on Property Tax Review and Reform, which I co-chaired, has already done a deep dive on property taxation, though admittedly it suffered from lack of a larger perspective: the juxtaposition of housing, property taxation, and school funding,” he said.
Rep. Dan Troy, D-Willowick, who served on the joint property tax committee, said he is glad the governor vetoed some of the items because they weren’t properly vetted before they were slipped in the budget.
He has always maintained the first committee didn’t do its job properly because they didn’t offer concrete solutions. He hopes this time — he’d like to serve on DeWine’s panel — they do.
“I always like to say at the beginning, listen if you come in here to protect your turf and say I’m not making any changes on anything that involves me, that’s not the attitude to come in with here,” he said. “We’re going to need to compromise, everybody’s not going to be a winner, everybody’s not going to be a total loser. What we need to do here is determine is what makes the best sense going forward.”
DeWine was asked why another study group is required and he replied “we have to do it” because the items he cut would have caused significant problems for the schools, “this was not going to be good for our students, ultimately all that matters is our students.”
Dan Tierney, DeWine’s deputy director of Media Relations, said the study group will be reporting directly to the governor on issues he wants vetted and will probably have a little different focus.
“The governor always uses the example, sometimes if you press down on a balloon another part bubbles up because it’s all one interconnected system,” Tierney said. “So property taxes cannot be considered in a vacuum without what the system output is, which is the effect it has on schools and school funding. It’s not the only levy out there but its the biggest and most significant one.”
He said the governor vetoed the provisions because he was concerned about local control issues, about “undoing the will” of the voters who approve levies and unintended consequences.
“If a school district were to have their funds capped and funds refunded, would they stand pat or would this likely incentivize them to go back to the ballot,” he said. “And if they approve that you’re back to square one and there’s no property tax relief.”
He didn’t touch the measure that allows county commissioners to offer their own “piggyback” Homestead exemptions for the needy and veterans and 2.5% owner occupied tax rollback, using county funds.
House Speaker Matt Huffman said they are pondering overrides.
“As with every budget, there are always some disagreements on specific provisions. While disappointed in the vetoes, I am in the process of talking with members of our caucus, many of whom have already expressed an eagerness to return to the statehouse soon to consider veto overrides,” he said. “Particularly in the area of property tax relief passed by the legislature, our caucus is mindful of the urgency many Ohioans are feeling.”
Since January, the legislature has introduced 30 bills that touch property tax reform, compared to 23 over the previous two-year General Assembly. Last GA only two measures have become law, namely indexing the homestead exemption to inflation and a small measure for surviving spouses of disabled veterans.
This year there are 10 bills that haven’t had a single hearing and only two that have passed from one chamber to the other.
As a result of the legislature’s inability to pass meaningful tax reform, the Committee to Eliminate Property Taxes, has been gathering petition signatures to get a constitutional amendment to eliminate property taxes altogether on a statewide ballot. They missed the deadline for the November ballot — they’ve only been collecting since mid-May and need 413,487 valid signatures — but they aren’t quitting.
“This is not going to stop until we’re on the ballot,” Beth Blackmarr, the spokeswoman for Citizens for Property Tax Reform said. “We’re in it for the long haul and we’re in it for the citizens of Ohio.”
About the Author