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Ohio’s former tax leader says the system to protect taxpayers from spikes in property taxes is broken

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COLUMBUS, Ohio (Statehouse News Bureau) — Many Ohio homeowners have been hit with huge property tax bills because of the rising valuation of their homes. A few bills have been proposed in the Statehouse but they are in the process of working through committees.

A person types on a calculator while working on their laptop. It seems like they are doing their taxes.
[Natee Meepian | shutterstock.com]
The state’s former tax commissioner told a panel considering ideas to change property tax laws that the existing statute meant to protect taxpayers from being priced out of their homes is broken.
Homeowners in Ohio receive new valuations on their property from their county auditors every few years. Recently, many homeowners saw the value of their property increase, dramatically in some cases. Former Tax Commission Tom Zaino told the Ohio Joint Committee on Property Tax Review and Reform said it affects property taxes.“Property owners generally like their property to increase in value. But they also want to be protected from unbudgeted, unvoted inflationary increases in real property. That’s Ohio’s history,” Zaino said.

Back in 1976, House Bill 920 was passed into law. It is meant to protect taxpayers from increases tied to rising property values. But Zaino said it’s broken.

“The school districts have done what I call their own type of tax planning by utilizing levies that have been enacted over the last 48 years which are exempt from HB 920,” Zaino said.

Zaino said schools have been using things like emergency or substitute levies that are not affected by HB 920. He said lawmakers could change tax law to allow those types of levies to be factored into HB 920. He also suggested other possible changes including changing the Homestead Tax Exemption or implementing income-based caps on tax hikes. He also suggested allowing homeowners to make payments on property taxes or allow unpaid property taxes to be put on hold and serve as liens on the property that would be paid when it is sold.

Rep. Daniel Troy (D-Willowick) said he thinks the constitution would not allow lawmakers alone to make some changes to HB 920 as Zaino suggested. Troy said Ohio voters might have to change the constitution to allow those.

The committee also heard from Eric Syverson of the National Conference of State Legislators, who said most other states have started providing more money for K-12 education in recent years, relying less on property taxes to fund schools. And he said that shift was partly due to lawsuits over school funding.