COLUMBUS — Many Ohioans didn’t realize the state was picking up as much as 12.5 percent of their local property tax bills, one Senate Republican recently said.
Perhaps, added a Democratic colleague, but they’ll certainly notice it when the bill goes up.
After a tradition of some 40 years of subsidizing local taxes, Gov. John Kasich and Republicans in the Ohio House and Senate applied the brakes. Local governments and schools heading for the ballot in November to ask voters to support new or replacement levies will have to tell them that the price tags attached will be higher than they were previously told. The taxpayer will pay the entire tab for any new taxes approved.
“If you and your local government decide that you need additional resources, because of whatever reason, you’re going to have to have truth in taxation when you go to the people,” said Senate President Keith Faber, R-Celina, as lawmakers recently finalized the $62 billion, two-year budget.
“They’re not going to ask the state taxpayers to subsidize their local levy because that’s what’s been happening,” he said. “For those who say, ‘Oh no. You’re making it more difficult to raise property tax levies,’ the response is, ‘Are you for property tax levies?’ I’m not.”
As part of a broader tax package in the budget, GOP lawmakers have drawn the line on expansion of the so-called property tax rollback for all local taxpayers as well as the homestead exemption benefiting senior citizen and disabled homeowners. The provisions were approved without a single vote by Democratic lawmakers.
Under the rollback program, the state pays the first 10 percent of the tax bill for all property owners plus 2.5 percent for owner-occupied homes. The state will continue to pay the tab on existing levies and their renewals but will no longer subsidize new levies.
In addition, an income limit will be restored to the homestead exemption. The state will continue to pay the bill on the first $25,000 in home market value for those already in the program, but all new senior citizen and disabled homeowners entering the program will have to prove they earn less than $30,000 a year.
For the state, any savings are expected to be minimal in the short term. But supporters see it as taking control of a $1.7 billion-a-year portion of the state budget affected by decisions made at the local level and not in Columbus.