Ohio lawmakers enacted property tax relief, but it may raise taxes by millions ...Middle East

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Ohio lawmakers enacted property tax relief, but it may raise taxes by millions

COLUMBUS, Ohio (WCMH) -- Legislators are trying to bring property tax relief, but recent changes bring growing pains for school districts and possible tax increases in the millions.

In June, Ohio legislators attempted to incorporate property tax relief into the biennial budget, but Gov. Mike DeWine vetoed several provisions, concerned that relief would not be worth the cost to local schools that rely on tax revenue. Last Wednesday, the Ohio Senate successfully voted to override one of DeWine's property tax vetoes, banning new emergency, substitute and replacement levies starting Jan. 1. See previous coverage of the veto in the video player above.

    Legislators in favor of the override said words like "replacement" and "emergency" can be misleading, so the change will offer transparency to voters. The change does not affect current levies or levies on the November ballot, so any relief would be delayed. This decision removes options for school districts, although fewer options may not equate to fewer levy requests. 

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    Experts fear the change could still raise taxes. Before 2014, the state automatically paid 12.5% of local school levy property tax bills before they hit taxpayers. The state legislature removed that credit for any levies enacted in or after 2014. However, it retained the credit for renewals and extensions of pre-2014 levies. Now, emergency and replacement levies that have carried that credit will expire, and will need to be replaced with new levies that don't experience the credit.

    Without the credit, districts will likely have to ask for a larger levy in order to make the same revenue as the expiring levy. Ohio Tax Group co-chair Bill Seitz said the legislature's veto override likely accidentally raised taxes by more than $90 million by not accounting for the credit. He said Ohio will need to pass new legislation protecting the credit, or tax bills will increase.

    Senate Republican spokesperson John Fortney said another expected override would address this issue, allowing county budget commissioners to adjust levy rates. That override would need to start in the House, and indirectly address concerns rather than directly protecting the credit.

    School districts rely heavily on local property taxes because Ohio funds schools by a combination of state and local funding. The state uses a complex formula to determine how much funding each district should receive, and most remaining costs are covered at the local level. 

    This summer, the state continued using the formula but did not fully update it, which the Ohio Education Association argues is underfunding public schools by nearly $3 billion. When districts receive less state funding, they must cut costs or ask for more local funding, typically through property tax levies. 

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    "We believe it is critical for the state to increase investment in education, which creates the workforce, by making sure education formulas are fully funded," Columbus City Schools spokesperson Michael Brown said.

    According to Ohio Education Policy Institute researcher and expert Howard Fleeter, now-banned levies made up 10% of all school property tax revenue in 2024. Not all school districts use these levy types, but substitute and emergency levies contributed more than $122 million to central Ohio districts last year.

    Replacement levies are rarer; the Ohio Education Policy Institute found fewer than 1% of school levies place on the ballot between 2014 and 2023 were replacements.

    In the immediate future, the change has limited effects on most local districts. In a message to families, Bexley City Schools said it does not use those levy types, but is watching carefully as the legislature has indicated it may override other vetoes in the coming weeks. Brown agreed that the override won't bring any immediate impact to Columbus schools.

    "We will monitor how the recommendations translate into bills at the legislature," Brown said.

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    Removing levy types is likely the first of several property tax changes. DeWine, upon issuing his vetoes, appointed a work group tasked with recommending changes to provide tax relief. That group issued its report on Sept. 30, offering 20 suggestions for change, many of which pertain to schools.

    Legislators have also indicated they may try to override other property tax vetoes, which districts say could be even more influential in cutting funding for schools.

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