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As huge property tax bills strain homeowners budgets.

Two efforts are underway to fight back.

One, a panel looking into what state policies and laws to change.

And a group gathering signatures to ask voters to abolish property taxes.

That's all this week in the state of Ohio.

Welcome to the state of Ohio.

I'm Karen Kasler, and his vetoes are for property tax related items and the two year state budget.

Governor Mike DeWine created a working group to look into Ohio's property tax laws.

Legislators said such a panel was not needed since a bipartisan joint commission of lawmakers had done that.

And earlier this year delivered 21 recommendations, four of which were in the budget in some form, along with a 40% cap on property tax collected by school districts as a percentage of their operating budgets, with the rest returned to taxpayers.

But DeWine said this group would come up with suggestions by the end of next month on how to help struggling homeowners, renters and farmers while still funding critical local services.

The panel met last week and decided that going forward, it would meet privately and not accept public testimony.

The panel is chaired by two Republicans, former congressman and current head of the Ohio Business Roundtable, Pat Tiberi, and veteran former state lawmaker Bill Seitz, who I spoke to this week.

why is this working group on property tax laws needed?

If there were 21 recommendations from the bipartisan Joint Commission looked into property tax laws last session.

Right.

Well, number one, the 21 recommendations, as the report itself noticed, were contradictory to one another in many cases.

Number two, the 21 recommendations were in the form of a single sentence without any implementing language, or anything remotely, that would pass muster with LSC.

There's a lot of meat to put on those bones.

And then number three, I think the governor, wanted to make sure that there was adequate input, on the implementation phase from those folks who are most involved and most affected by the changes.

What am I talking about?

County auditors, county treasurers, school superintendents, county commissioners, mayor, that's the makeup of our committee.

Other than other than me and, Congressman Tiberi.

So it's to provide that additional set of eyes and try to solicit recommendations.

I do not view this as being adversarial to the legislature at all.

I think we are going to perhaps refine some of the things that they have already done and suggest for refinements, but also to suggest for additional things that they should do.

And on that, we all agree.

I've heard from various key legislators.

Oh.

This is just the first step.

We've got a lot more to do on this subject.

I agree with that.

In the limited 60 day time frame that's available to us, we're going to give it our, old college try to come up with a a weightier, meatier set of recommendations.

The some of which are already pending before the General Assembly and have not yet passed.

When you talk about having a working group that looks into the way that this is going to impact people who are directly affected, why won't these meetings be open to the public?

Why won't you be taking public testimony?

Well, some of them.

But first of all, we've only had one meeting that was closed and that was this week.

And the purpose of that meeting was simply to let each of the individual members of the task force, offer their own initial points of view about what we should be looking at and about the big fat binder of materials that the governor's staff provided to us about a week ago.

The next meeting will be open to the public, and we've had a lively debate among the members of the task force whether they should all be public or some private and some public.

I don't know, I don't care.

Most of us came down and said, well, we don't care if it's public, but some people are reluctant to be as candid as they might otherwise want to be.

In a public setting.

And so we're trying to reach that balance, recognizing that this workgroup is not subject to the, open meetings law, justice system, ad hoc group, will you be taking public testimony that we do intend to have invited testimony, invited testimony, and we're going to be, talking early next week about the schedule for who we should invite and when we should invite them.

Actually, I had raised this week with our group, should we start invited testimony next Thursday at our next Thursday meeting, they said no, we would like to come up with some, concrete recommendations and then have the invited testimony be from experts who could comment.

Perhaps offer further suggestions on what we've come up with.

I said, well, if that's what you all want to do, you know, I'll, I'll have the wishes of the majority.

Senator Louis Blessing has said that state lawmakers in two camps here, when it comes to property tax, is one that wants to spend state dollars and means test property tax relief so locals won't get hurt.

The other doesn't want to spend state dollars, which means locals will bear the brunt.

Is that an accurate way to look at what's happening?

Well, that it is difficult to provide meaningful property tax relief without some state funding involvement.

All right.

However, there are also a number of reforms that can be made, to change things at the local level to retard the rate of growth.

So-called inside millage and to retard the rate of growth under certain kinds of school levies that currently, do not count towards the 20 mill floor and probably should count towards the 20 mill floor.

So I don't view it as an either or situation.

I'm very aware that the legislative leaders have said we don't want to spend any money.

Okay.

Maybe you don't want to spend it today, but maybe you might want to spend it later.

If economics improve.

But raising the homestead exemption and adopting some form of circuit breaker as 30 states have already done, are two of the most common ways in the states of providing relief.

And, those measures all take state contribution.

So, you know, we're going to look into those measures, but we're very cognizant of the legislature's desire to spend as little state money as possible that, you know, that they're elected.

I'm not anymore.

So they kind of get the call that shot is going to bring change in the property tax burden.

In the last 50 years.

In 1975, property taxes were split, 53.9% paid by commercial property owners, 46.1% by residential and agricultural property owners.

Now, in 2023, 32.5% were paid by commercial property owners, 67.5 paid by residential and agriculture property owners.

Is that part of the problem here?

Well, yes, I believe that is part of the problem we have over my 24 years in the legislature, gone to great lengths to make Ohio a business friendly state.

We abolish the tangible personal property tax, which was a significant source of revenue for our schools.

We abolished that in 2005.

In the interest of helping out business, and getting rid of the horrid inventory tax, we said we would replace that revenue with the cap tax, the commercial activity tax, which we did for a while.

But in the last couple of years, they have so far increased the, exclusions from the cap tax, that the cap tax is now not replacing the tangible personal property tax.

And as a result, the schools deprived of that revenue are having to go back to the ballot and resort to various stratagems to try to get inflationary growth on their revenue stream.

So, you know, I I'm a fair guy, I plead guilty, I was part of the group that wanted to improve our business climate.

We did.

We made tremendous strides on reducing income taxes, including most recently this year.

We're down to a flat tax of 2.75%, which is a hell of a lot better than the nine different brackets that existed when I first took office in 2001.

But the consequence that I'm sure was an unintended consequence was to exacerbate the burden.

On residential property owners of property tax.

That's true.

What do you think needs to be done about, say, tax abatements?

Well, I, I believe that we need to I personally believe that the schools need a greater say before Craig's, which is a form of abatement and tests tax increment financing before those devices are used by local government.

The schools deserve a say over their application in residential areas because it's a residential area, is the beneficiary of, of a ten year abatement of taxes.

That just means that those people are blessed and everybody else has to pick up the flat for where, you know, for that that grace extended to a small set of people.

You're.

When I was trustee in Green Township many, many years ago, we created a huge tax increment finance program.

But we kept our schools 100% harmless.

You can have a very successful 12 while still recognizing the need of our schools for adequate revenue.

So I would hope that one of our recommendations and by the way, this is there are bills pending that would do this, that would, you know, extend the greater say to the school districts over the willy nilly extension of tax abatements on residential property by units of local government.

Real quick, are you in favor of a cap on the amount of collected property tax from voter approved levies that a district can hold as a percentage of its operating budget, with the rest refund the taxpayers?

That's that 40% cap is in the budget.

Well, I think the reaction amount from amongst our task force, and certainly my own reaction is that that's not a very prudent thing to do.

That I'm the analogy I've used here throughout is to the Bible.

If you remember, in the Bible they talked about the seven fat years followed by the seven lean years.

The big game was make sure your storehouses are filled during the seven fat years because you will need them during the seven lean years.

A one size fits all cap, probably does not really work.

And so the task force members, I think, unanimously, do not want to see that.

Having said that, though, I think there's widespread interest on our task force in a different approach, which is representative whoopsies.

House Bill 186 that basically says when the rate of increase in property valuations greatly exceeds the consumer price index inflation, these districts will only get the rate of actual inflation and not the much higher increase caused by the much higher valuations.

That's a good approach.

A variant of that approach is to limit the rate of increase to a specified percentage 3%, 4%.

Those are all fixed subjects for discussion.

But I know that the leading advocates in the legislature for more property tax reform, are with me in saying that House Bill 186 must pass.

I heard Representative Thomas say that last week.

And so that there's an area where I think we'll find common ground and finally, there's an effort to put before voters next fall an amendment that would abolish property taxes in Ohio entirely.

Are you and others taking this seriously?

I mean, what do you think the effect would be?

Well, I can tell everybody right now that the total elimination of property taxes in Ohio would create a 23 with $1 billion shortfall in money that currently supports local services exclusively your cops, your firemen, your teachers, your schools, your library, your zoos, your mental health levies, your your, etc.

and that's all falling on the local level.

That's a big problem.

When you ask the proponents of this amendment, what would you replace that revenue with?

They're kind of, elusive in their answer.

I've heard them suggest increased income taxes.

Well, I don't really see any appetite to do that.

After the legislature has spent a quarter of a century reducing it on taxes.

And then they talk about increasing sales taxes.

But you would need a statewide sales tax rate of something approximating 20%, to make up for that revenue.

And let's not forget, a whole lot of taxing jurisdictions have no power or authority to levy or sales tax.

Townships don't.

Libraries don't.

Mental health don't, the parks do not.

So suggesting that we raise the sales tax, when those entities, many of them don't even have authority to do a sales tax, is not the smartest thing in the world to me, to do.

And as I said yesterday, we need an eight lane Brant Spence Bridge to Kentucky.

If we had a 20% sales tax rate here in Hamilton County, because everybody would be right across the river to Kentucky and do all their buying over there.

That effort to abolish property taxes was born out of years of frustration, says one of its founders.

Brian Massie, said he met with lawmakers in recent years, and he said he found many of them to be partizan and dismissive of the experiences of Ohioans, especially seniors, who fear the taxes on the homes they own are close to breaking them.

He says he experienced similarly unsatisfying results after talking with local officials about those soaring property taxes.

Massie then concluded that elected officials are not worried enough about average citizens, and came up with a dramatic scorched earth plan through the group citizens for Property Tax Reform.

So when we put all of that into the equation, we said, no, we've got to starve this beast because they're not they're not thinking about the average citizen.

We, we had a revaluation in Lake County of 30%.

I said, we've got to we've got to tell the people.

We have to tell the people of how much they're going to be charged and how much each taxing authority is going to get.

No, Brian, you can't do that.

Well, why is that?

Well, if you tell the people the truth, they may not vote for any tax levies that are on the ballot.

I said that's that's insane.

Who's looking out for the average citizen?

Because what's happening, be they Democrat or Republican, they're not looking out for the constituents who are looking out for their donor class.

Well, let me ask you, how do you feel?

Schools, law enforcement, fire libraries, etc.?

How should they be funded?

I get that question all the time.

And, first and foremost that, I you talk about schools, schools, make up about 60 to 70% of the, taxpayers tax bill, depending on the school district that they, they support.

And if the school district is that the 20 mill floor, we can get into the 20 mill floor, but most people won't even understand it.

But that is another deception by the legislators, along with the when they treat outside millage like inside millage.

The first and first thing that I would do is not replacing dollar for dollar.

We're not convinced that we should replace dollar for dollar.

What we're saying.

You better start looking at the schools because we're spending, on average, about 17, $18,000 per student on average.

We've done the study of the Cup reports and, we say, do we need 611 school districts in the state in Lake County, and we've got nine different school districts.

And we said, well, what if we had one county school district?

What if we had one superintendent instead of nine?

Superintendent?

We had one curriculum director for the county versus nine curriculum.

So we've got a tremendous overhead and administrative cost with these schools that could be, cut down drastically.

But if it passes and property taxes are abolished, why didn't you come up with a plan to replace that or say, replace sales tax, replace property taxes with sales taxes?

I mean, the chaos that could result here isn't that interesting?

They're saying to the people I've heard this from, you know, senators, he was on Senator Serino was on the, radio program.

He says it is irresponsible for this group to abolish without having the, the idea an exact answer for how we're going to replace it.

I thought that that we were paying them to do so.

You know, that is a ploy by politicians saying, well, they don't have the it they don't have the answer.

Since 1997, with the Roth case.

So and they're trying to push it on us.

And now we're saying you don't want to be, responsible to the people that you're, that that elected you.

And you want us to solve the problems that you have created?

I don't think so.

And the same thing with police, fire roads and bridges.

I what I told my Concord Township administrator, Andy Rosas.

And Andy, send me a bill.

I'm not an anarchist.

I'll pay for these.

Reasonable expenses, but don't tie it to my home, Andy.

What don't the politicians understand about home ownership at home?

Why?

Is this an all volunteer effort?

Are you planning on raising money to hire paid circulators because you've got to get a huge number of signatures to make that out of the, 413,488 of my memories.

So we're looking at 500 to 600,000.

No we're not.

It's a grassroots initiative.

And we know that's probably never been done before.

But we we went out to get an estimate from company that could collect the signatures.

And it was $1 million.

We'd have to pay $1 million.

And when I mentioned that, I said, to some, political officials, they said, oh, that's really cheap.

It's usually three, 4 or $5 million to do that effort.

Yeah.

So but that's not what conservative groups have said, that they will help you.

Yeah.

But it's again, we want all groups.

We'll take the Democrats, the Republican independents.

We don't check their credentials at the door.

If you're willing to save the freedom and liberty for the people in the state of Ohio, you're on board.

We don't control the local groups.

We're not paying for, people to collect signatures.

This is all volunteer.

It's costing us money to do this.

But we think it is the right thing to do for the people of Ohio.

While your idea is easy to explain, abolish property taxes, and we'll likely have a lot of initial support.

You're also likely to hit a firestorm of opposition from schools, law enforcement, state lawmakers, other politicians.

Are you?

How are you prepared to push back against that to see this?

Well, I'm we're we're just telling the people, look at who is willing to destroy your freedom and liberty.

Just look.

Just looking to have teachers and police officers and others who are going to come out and say, sure, why not?

Know it threatens their job on just in Concord, we found out, you know, from our recreation department, our hiking club.

They were, concerned that I'm going to lose my job because of you.

Brian Massey, I said, isn't that interesting?

But this.

But there's a community impact, potentially, to lose school teachers and police jobs.

I mean, there's a community impact here.

Why don't they start working now?

Why do if they're not worried about it, if they don't think we can get the, the the number of signatures?

Don't worry about it.

Just keep on going.

Just keep on going, and then we'll let you know when.

When we're real close and maybe you'll start working.

But I would highly recommend they take us serious.

That's why we're not telling anybody how many signatures we have.

Once we get to the 50% level and we need 44 counties to, they need 5% of the votes in the last gubernatorial election.

So we're we're monitoring that and we're getting signatures and, you know, daily a lot of, we're already we have signatures from 84 of the 88 counties.

And that tells me that people are listening.

So I just say the legislators, if you're not worried, if you think we're just, we're not serious.

Just keep on doing what you're doing, and we're.

And you will you will see it on the ballot.

There's some question.

Do we want another May ballot or November ballot?

I'm saying sort of a moot point right now until we get the the actual number of signatures.

I've asked the secretary of State's office.

Can we put it on the May ballot?

And I got a definite maybe, you know, from them.

And they say, well, we never give any legal advice.

That's a legal advice.

Can we put it on or not?

I said, well, when is the May election?

Well, we haven't determined a date for a may election.

And the reason for that is, the rules say the 125 days before the election date.

You must have your, petitions and signatures in.

But what we're telling people is focus on the issue of getting the signatures and then what we're going to do, since this is a grassroots initiative.

If by the middle of December, we find that we have the number of signatures and we're shooting for five, 600,000 so that we know some are going to be thrown out for a variety of reasons.

We're going to let the people down.

We're going to take a poll.

This is a grassroots movement.

And that's not Brian Massie or the committee deciding for the people.

The people are going to decide.

On that note, you talked about state lawmakers.

Are you willing to negotiate with state lawmakers if they would meet with you and talk to you about proposals?

Are you considering stopping this effort?

If you've got the answers you want?

That's a good question, because, before the vote, to override Governor DeWine's veto, we, issued a press release, and we said it's irrelevant to us, because now, after talking to so many people throughout the state, they're saying they do not have a voice in this government.

No one is worried about them.

So I'm the committee is saying you blew it when you didn't think about the average citizen.

And now we're going to get the signatures and we're going to let the citizens vote.

So you're going forward no matter what.

No matter what they could tell us.

All the schools are, we're going to come up with some other funding mechanism for schools, and we're going to.

It still doesn't matter to us.

Now, that may impact the actual election, but the promise that we made to the citizens is that we've got no agenda.

I'm not running for political office.

I'm not trying to make any money.

It's costing us money.

We believe that the citizens of the state of Ohio want their freedom and liberty back, and they're going to get a chance to vote to tell their legislators.

You better start thinking about us instead of the donor class.

Massie says Republican state lawmakers decision with the state budget to go to a flat income tax, which is a tax cut for people making over $100,000 a year, has him, in his words, scratching his head.

He says, quote, the average citizen is not clamoring for a reduction in income tax, end quote, and that this shows lawmakers don't understand what homeowners are saying.

And that is it for this week, for my colleagues at the Statehouse News Bureau of Ohio Public Media.

Thanks for watching.

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Support for the Statehouse News Bureau comes from Medical Mutual, dedicated to the health and well-being of Ohioans, offering health insurance plans, as well as dental, vision and wellness programs to help people achieve their goals and remain healthy.

More at Med mutual.com.

The law offices of Porter, right, Morris and Arthur LLP.

Porter Wright is dedicated to bringing inspired legal outcomes to the Ohio business community.

More at porterwright.com.

Porter Wright inspired Every day in Ohio Education Association, representing 120,000 educators who are united in their mission to create the excellent public schools.

Every child deserves more at OHEA.org.