The Ohio House has advanced a measure to eliminate local jurisdictions’ authority to advance replacement property tax levies.
In their sponsor testimony to the Ohio House Ways & Means Committee, state Reps. Adam Mathews, R-Lebanon, and Thomas Hall, R-Madison Twp., said House Bill 28 would increase local control of property taxes and give voters more power. If approved by lawmakers and signed into law, the prohibition would take effect starting with elections held on or after Oct. 1.
“Ohioans are suffering as a result of property tax increases throughout many Ohio counties,” Hall said in a release. “This bill is a step in the right direction and will eliminate confusion related to our property tax system when voters are considering levies at the ballot box.”
In written testimony, NFIB State Director Chris Ferruso called the measure “a voter transparency bill.”
“Renewal levies continue a previously voter approved levy, raising roughly the same amount of revenue,” Ferruso said.
“Replacement levies, however, resets the valuation, effectively increasing the amount of revenue raised based upon the higher value of properties,” Ferruso added. “While voters may be told they are paying the same effective tax rate, it is likely on a higher reappraised value of the property leading to increased owner costs.”
According to an analysis from the Ohio Legislative Service Commission, the measure would “not have a direct fiscal effect on local taxing authorities.”
However, the “change could result in an indeterminate loss of tax revenue for some political subdivisions that would otherwise receive voter approval for their prospective ballot questions,” the LSC said in its analysis.
The LSC found that voters approved nearly half (49%) of additional money levies in the 2024 general election following 63% in 2022 and 71% in 2020. According to the review, the approval rate has declined in recent years as property values have grown faster than normal.
In contrast, voters approved 91% of renewal levies in 2024 after approving 98% during the 2022 and 2020 cycles. They similarly approved a large margin of replacement levies — 75% in 2024 after 97% in 2022 and 87% in 2020.
“For far too long, the world of property taxation and levies to raise funds on property valuation remains shrouded in opaque language, favoring only those with a keen interest in the topic or who spend a career in the field,” Liz Baumgartner, director of economic development and tax policy for the Ohio Chamber of Commerce, said in prepared testimony.
“Millage, inside millage, reduction factors, market value, tax value, Class I, Class II, and other terminology can cause confusion for Ohio Voters,” Baumgartner added. “HB 28 begins the process of adding plain language to the structure with the removal of the word replacement and the use of renewal levies for status quo or increases in taxes raised by the levy.”
Unsurprisingly, the proposal drew opposition from local government groups such as the Ohio Township Association and the Ohio Municipal League.
“Outside of the property tax, townships have very limited funding sources,” Kyle Brooks, director of governmental affairs for the Ohio Township Association, said in prepared testimony to the House Ways & Means Committee. “Township services, such as fire, EMS, and cemeteries, are funded almost exclusively by the property tax.
“Due to the lack of additional revenue sources, townships must seek property tax levy approval to offer and maintain essential services,” Brooks added.
In prepared testimony, Kent Scarrett, executive director of the Ohio Municipal League, said a “third of municipalities do not have a municipal income tax, making revenue generated from the local property tax an even more critical source of local funding. HB28 has the potential to hinder the sustainability of this revenue.”
