Property Tax Q&A: Answers from State Representative David Thomas

Thank you to those who participated in the audience Q&A during our June Briefings for Business (B4B): Let's Talk Property Taxes. While we weren't able to get to every question during the program, we promised to follow up with responses from our panelists. In this issue, we're featuring State Representative David Thomas's answers and look forward to sharing additional responses from our panelists in future newsletters.

School Funding

Q. What options are being explored for reforming school funding? With high property taxes, increase in levies, and vouchers sending tax dollars to private schools, how do we even begin this conversation?

A. How we begin the conversation is by asking how much can the taxpayer sustain and how much more has been placed into public schools since 2020 from taxpayers. At some point, the conversation has to shift from how much to how more efficiently.

Q. What effect has the state voucher program had on public school funding?

A. It has actually not. Separate pots of money. Those that say that voucher money should stay with the public school are asking taxpayers to fund empty chairs instead of the student. The public school does not receive the state dollars for that pupil, but that money goes back into the pot to help other public school students. The voucher dollars are a separate pool that does not lower what is allocated to public schools.

Inflationary Tax Credit

Q. Can you explain how the decrease in the non-business credit and the increase in the owner-occupancy credit don't end up being a "wash" or offsetting each other?

A. The removal of the non-business credit is roughly $500 million going to vacant land, rentals, second homes, etc. Now, that $500 million is going just to homeowners. So, homeowners will get more.

Q. After a six-year stretch of large increases, will any of the enacted bills provide a reduction in existing property tax levels? Or is 2025 the baseline and go-forward tax increases will be capped at inflation?

A. Yes, HB 186 starts the inflation cap for schools in the 2nd half, with most Ohioans seeing a decrease in their 2nd half bills. We also start the owner occupancy credit to lower bills, have the Budget Commission which can lower rates, and counties can double current credits now too.

House Bills/Mandates

Q. HB 309: Who determines which levies are "unnecessary" or "excessive?" What criteria will be used? How can budget committee members be expected to fully understand all aspects of twp/municipal/school budget needs? Strictly financial determination, or could ideological/political intents be used?

A. The members of the Budget Commission, the elected Auditor, Treasurer, and Prosecutor. We placed agreed-upon criteria in HB 309. The taxpayer cannot be expected to know and judge each local government budget, but they need a body who can. The local entity does still have an appeal option to the State Board of Tax Appeals.

Citizen-Driven Initiative to Eliminate Property Taxes

Q. Since there is a strong possibility that the citizen-driven referendum to abolish property taxes will make it to the ballot, if it passes, what plans are being looked at to address the funding needs of local governments and schools?

A. The petition still needs hundreds of thousands of signatures to make the November 2027 ballot. It does not speak to replacement revenue. Intrinsically, the idea would be using current revenue of sales, income, and severe cutting of government expenditures to make it work.

Specifically Addressed to Representative Thomas

Q. Is there another state taxing model that you think could work for Ohio?

A. In short, no. We are pulling from small pieces of all states. Ohio is unique in a variety of ways that would not make it possible to copy other states, largely due to our excessive number of local governments and the control they have in our constitution and in historical practice.

Other

Q. Interested in the rationale for addressing the revenue side prior to addressing the spending/expense side. It intuitively seems backwards.

A. It is step 1. The revenue side is immediate to stop the bleeding. Step 2 is the spending side, which has to be addressed also. The system was set up so that no matter the spending, revenues would keep spiking and unvoted windfalls would continue. No longer. Now, voters have the say, but we have to control the spending to prevent growing and growing requests.