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looking over the impact of the federal shutdown.

Now that it's over and lawmakers are looking over dozens of property tax bills.

We hear from two key players in the debate this weekend.

The state of Ohio.

Welcome to the state of Ohio.

I'm Karen Kasler.

The longest federal government shutdown in U.S.

history is over.

But there's uncertainty about what damage was done in that 43 day closure, and how long before life will be back to normal for the millions of Ohioans who were affected by it?

The Ohio Department of Job and Family Services says the U.S.

Department of Agriculture has ensured that 1.4 million Ohioans will get their full Supplemental Nutrition Assistance Program benefits for November.

This week, the state processed partial Snap payments for eligible households that will now be deducted from the full amount that those households are set to get for November.

And then benefits will be transferred to electronic benefit transfer or debit cards.

Odie JFS is not giving a timeline or a date.

$23 billion in property taxes was collected in Ohio last year, 16.7 billion of that was from residential and agricultural taxpayers.

The burden is shifted dramatically to those taxpayers.

In 1976, it was almost an even split between them and businesses.

But now homeowners and farmers pay 67.5% of all property taxes, while businesses and commercial entities pay 32.5%.

Property tax bills have gone up significantly in the last few years by 25 to 35%, depending on who you consult for the estimate.

School funding experts Howard Slater and Greg Browning say Ohioans are paying the eighth highest property taxes in the country.

There are more than 40 bills related to property tax laws that have been proposed in the legislature this year.

34 in the House and ten in the Senate.

At least a dozen of the House bills are sponsored by Republican Representative David Thomas.

I spoke with him this week about the latest moves on property tax law changes.

You shared some thoughts on social media about Tuesday's election, noting that voters approved a lot of property tax levies, 21, of 21 Trumbull County and 30 of 36 in Ashtabula County, which are two counties in your district, plus higher than normal rates across the state of Ohio.

You closed it west.

Quote.

We can't protect taxpayers from tax hikes.

We choose ourselves at the ballot box.

What do you mean by that?

So the legislature, most of our actions have been on the UN voted increases that peace for your value goes up.

You've done nothing, but your tax bill goes up too.

That's where the most frustrations come from.

But what we saw last Tuesday was essentially the voters choosing, I think, roughly 80% of levies across the state passed.

So the voters actually had the opportunity to decrease their bills right there.

And they didn't.

They actually increased their bills.

Voter control is a huge thing in Ohio.

We want the voters to be in the driver's seat for where this bills go.

And so the voters and approved these new tax bills when they come due in January.

We can't protect the voters from that.

But this is what they wanted.

Yes, they've decided that.

But we can't protect them from those, voted increases that they had no say over.

So I think philosophically, that's where most of our reforms have come down on is limiting preventing UN voted increases with the voters approve an increase or approve a levy, then that's what they want and that's what they want to pay.

but you're also looking at eliminating the kinds of levies that people can see.

I mean, you've done that a little bit with school levies, but also there's a move to change library levies and eliminate that mandate, that library levies need to go to voters.

Don't voters get the right and the opportunity to vote on things they want?

Are you just trying to keep them from voting on the things they want to vote on?

No.

So our goal is transparency and giving the voters the full look at what they're actually saying.

So our goal is to have the voters view the ballot and know exactly what they're actually saying, yes or no, to the levies that we've removed that they'll never see again.

Emergency levies, replacement levies, substitute levies, all these different confusing things.

Language.

That's all gone.

So now voters moving forward will clearly no.

Will this levy increase?

My taxes or will it keep my taxes the same?

And how do I feel about that?

And you know, we're going to see a lot of transparency efforts because the voters should have the full control and say, but what they're actually looking at should be as clear and easy to understand too, as possible as well.

So some of the changes that we're making make it much more easier for the voters to understand, but also make it much more empowering for the voters to decide what's actually happening with their tax bill.

There has been some frustration over that bill on eliminating the mandate.

The library levies are presented to voters.

People are saying they want that opportunity to vote.

Shouldn't voters get that opportunity to support the things that they want to support?

They understand what they're voting for.

They want to do it.

So this is House Bill 137.

And essentially right now, if a library goes to the county commissioners, they say, we want to put a levy on.

The county commissioner shall put that levy on there, the taxing authority.

The county commissioners can't change the levy amount.

They can't change the time period.

They shall put it on.

That's not the case, though, with children's service levies or levies or any of the other types of levies the county commissioners actually place, there's the ability then to have a conversation over decreasing or changing the time.

So why shouldn't then the essentially the voters have a little more of a a check and balances before they even get to have that say over.

Is this really needed?

Is this something right now that we should be seeing?

I think when we're talking about increasing taxes, we should make it as difficult as possible in order for the government to actually increase our tax bill.

It's still in the voters have their say, but going through several processes I don't think is a bad thing.

If you're actually asking for more tax dollars.

There's been this debate about how much the state should pay when it comes to property tax relief versus the local communities, and not only the money that that comes in, but the cutting.

That would have to be done.

And that sort of thing is eliminating the kinds of levies that people can vote on a way for the state to avoid putting more money into some of these, into schools, into some of these other areas.

No.

So it's actually a way for our voters to have much more transparency with what they're voting on.

There is the go to comment, and I think this is very true.

What is actual tax reform?

We hear a lot of folks say the state should pay this, or the state should be subsidizing that.

That's not actually reforming taxes.

That's increasing taxes.

Here, growing government at the local level and not decreasing the amount that voters are ultimately paying.

And so when we're looking at tax reform, really we should be saying and basing it into the government getting less and performing the services that the voters ultimately want.

So these levy changes are for transparency purposes.

The state is still pumping in.

I tell folks, there's a question.

You're in the Senate committee.

You know, we've pumped in roughly $1 billion more every year to our public schools.

While we've done that, the public schools have taken billions and billions more in property tax revenue.

So the argument that the state should be paying this, that we don't have this much of an increase on our property owners that didn't actually happen last five years.

They got government, got more tax money here and more tax money here.

And that's that's why I think our voters are upset over.

Do you support changing the approval threshold for levies.

So that's actually my House bill.

355 along with Representative King.

It would raise the threshold from 50%, up to 60%.

I think there needs to be some type of understanding that when you're increasing taxes on the whole community, the whole community should really have buy in.

What we saw on last Tuesday, we saw an average of 25% turnouts.

Levies actually rep Kings district one levy passed a new levy 52% of the vote.

So essentially, you're saying that 13% of the voters in that district approve this higher tax, which impacts the entire district.

That's not the full community.

Having it say now they should turned out to vote no, I completely agree.

I think I already know what you're gonna say, but if we're raising taxes on folks, there should be some type of of buy in that's greater than just that minimum threshold.

Do you want it to get to the point where levies would have to be that the turnout would have to be greater for a levy to even be on the battle for loving to even pass?

Are you in my brain?

Because I know that there's that concept.

I think when we're taxing everyone property owners, are you know, you come on multiple properties, for example, and you only have one vote versus income tax for the pieces where everyone's kind of chipping in together.

So with property wise, you know, you truly are having an impact on your entire community.

And I think that there should be some type of recognition that more community support for higher taxes is a better way to actually increase that process.

There are communities, though, that will never be able to get property taxes passed because they won't see that kind of turnout potentially, and that's very possible.

There are also communities that never pass levies right now either, that, you know, there's not the community support.

And I think that speaks to the community doesn't want it.

Now, what that looks like, that's just a philosophical thing.

I think if you're going to raise taxes, you should have as much in as possible.

But that bill has not actually had a hearing yet.

And so, you know, we're still kind of discussing what that could look like, but these voted increases come January, people will be hurt by all of the votes that happened this past November.

Remind them, did you show up and vote if you did, then you did your part.

But if you didn't, then really?

Yeah.

That's on you.

You you talked about you talked about the idea of property tax reform and what is that?

We heard about income tax reform over the last eight budgets where income taxes have been cut.

If you lawmakers are getting calls and frustration from constituents about property taxes, but not really about income taxes, why aren't you doing property tax reform in the same way that you're doing income tax reform and putting actual state money toward this?

If if we could decrease the property tax burden, like we've been decreasing the income tax burden at the state level, I would love to be able to do that.

That'd be essentially us cutting roughly 1 billion to $2 billion over two years of property taxes, saying you're not going to accept this money because that's what we've done at the state level.

We've actually decreased that income tax revenue over two years.

Property tax wise.

That's not state revenue, that's purely local.

So we've not been able to have that same impact.

But that goes back to the whole idea.

Do I want to send my money down to Columbus and hope it comes back to Ashtabula?

Or would I rather send less to Columbus that have more of it for me to decide than in Ashtabula?

Where should it go?

What type of levies or services do I actually want?

I think that local piece of keeping my money as close as possible is kind of the full philosophy of our our tax policy in Columbus, as all these property tax bills are coming forward.

You still have this movement to abolish property taxes where volunteers are gathered, signatures to put it on next November's ballot.

The group says they'll continue regardless of what the legislator does.

I'm wondering if lawmakers are thinking that you need to do something to prepare for this, making the ballot and possibly passing, because if it happens, we keep hearing words like chaos and that the sales tax would have to go up to at least 15% and that sort of thing.

Should you be preparing now for this?

So step one was essentially correcting the wrongs that happened over the last five years.

What happened the last five years will not happen again in Ohio.

That was step one.

That's these five bills we passed and will be signed hopefully in November.

Step two then, is yes, responding and thinking about, okay, what does this look like?

We're already having conversations.

Nothing formalized yet.

We'll kind of continue to watch how the public responds.

But I think in our purview, what we've been able to do so far, the most property tax reform in 50 years.

The Ohio House passed in October of this year to correct the wrongs, to right moving forward, and to give decrease already starting next year.

I think that was that was a huge step.

It's not enough, but just showing where we've been.

That was I think, our best foot forward.

You've got those who are in this movement though that are saying this is a Band-Aid.

It's not enough.

They still want to push forward.

What do you tell them?

So there's two lanes.

They can have their lane.

They're focus on citizens.

They're going to abolish.

That's kind of they're there.

Push.

The legislative lane, though, is to reform the system as much as possible.

I think we have a responsibility.

Let's take this on the ballot.

We have a responsibility reform and to change things up until the day before the election.

So two lanes trying to achieve relatively the same thing, changes to our tax system that have truly been harming our citizens for the past 50 years.

What do you what's your thought on schools and local governments that are using these levies?

Because they need the money?

I mean, you keep talking about billions of dollars is being collected, and I believe it's $24 billion in property taxes that are collected statewide, according to Policy Matters.

Ohio.

But these local governments, law enforcement, schools, libraries, they they that's their funding.

What do you what do you say to that.

So it'll be 25 starting next year, which kind of speaks to you were the huge unfolded spikes that happened over the last five years.

Were those actually needed or did they just come?

Local governments accepted them and then they spent the money to now say, well, now we need that money because we've spent it.

We've hired more people or we've done certain things, and now we need that, that backfill of money.

I think that has to be a question where we change our taxpayer mindset and say, what services do I actually want to what can I afford to have a ladder truck, for example, in every single township in my county, the answer is now $1.5 million.

That's a perfect example of back in the day we could.

That was an expectation of taxpayers had.

Today, we have to change our mindset for how much we're actually willing to spend.

What services do we really want, because we simply cannot afford the tax structure that we have currently.

And the property side is, is, I think, literally bursting at the seams with that.

A leading legislative expert on the Democratic side is veteran lawmaker Dan Troy, who's the ranking member on the House Ways and Means Committee.

I also spoke to him this week and asked him about Thomas's social media post about the high passage rate of tax levies by voters, who also say they're frustrated at high property tax bills.

I was surprised at the approval rates at, last Tuesday's elections and a lot of these levies, I mean, libraries, but pretty much universally pass.

But they always do.

But, I because I thought, you know, how angry are the apparently, you know, the anger was not portrayed in that.

But again, I think it's it's like a lot of other things, you go to the citizenry, you explain to them, why we need this particular increase.

Although a lot of these were renewals, too.

So there's no increase in taxes, but, and again, you know, I'd like a better world where the state is picking up more of the freight on these things so that, they don't have to go to the voters for these property taxes.

But, again, that's that's the whole thing with our system is in Ohio.

Unlike other states, we could just set the property tax burden, and you don't really have any say in it.

In Ohio, anything over ten mills is subject to a vote of the people and all that.

And so, they they chose to do so.

And I don't know the rationale on each particular taxing entity.

But obviously the voters were convinced that the need was there, or the need was there to, to continue with the a renewal levy or the need was there for additional taxation through a new levy.

But again, I think we still have to look at protecting or helping out in those as much as possible.

I still would like to extend the ten of the 2.5% rollback back to all levies, not just, new and not just existing levies.

And also, again, through the state foundation formula, lessen the need for in other words, you're not going to eliminate the need for property tax millage to support your schools.

But let's lessen the amount of millage that maybe they need to ask for by fully funding that their school funding formula.

There have been bills to eliminate replacement and emergency levies.

There's now a bill that's still in committee that would eliminate the mandate that a library levy that comes through trustees is presented to voters, with what Representative Thomas said in mind that we can't protect voters from the tax increase.

They vote them for themselves.

Are lawmakers seeking to offer property tax relief by limiting the kinds of tax levies that voters see?

Well, that has been that has been my my, my complaint is that, we're talking about doing property tax relief, but, the state is putting little or no skin into the game or basically saying property tax relief comes out of your budgets.

We need to restrict the way that you can increase your revenues.

We need to reduce, even what they put in the budget.

House Bill 96.

My commissioners pulled the trigger on that, last week, where they, basically, offered a additional 2.5% owner occupied role back and, and additional money on the homestead exemption, but that didn't come out of county revenues.

That basically came out of the school district's revenues, the developmental disabilities revenues, the mental health, Addams board revenues, the senior citizens levy, etcetera, like that.

So, you know, if we're going to continue, if we're going to continue to have just one sided property tax relief that says, no, the fall is all at the local level.

So we need to basically reduce the amount of revenue you have or make it very much more difficult for you to get the revenue that you need.

I, I would rather see, you know, the state do that.

And again, it isn't a case where, we don't have the money.

I mean, we've given away five and a half, $6 billion in state income tax cuts, the last 5 or 6 years.

And nobody's really asked for those.

And while people are screaming for property tax relief.

So I think we, you know, we need to continue to, you know, not not hamstring the, the, local entities if they need these dollars.

But, we also need to help out, from our perspective, from the state budget so they don't have to go to the ballot, as often, or for as much as they particularly do.

Is this an effort, though, to avoid the state putting money in that instead of putting money in will limit what voters can see?

And should voters have the right to, to approve these things?

Well, I think I think there is some of that.

I mean, I even said that how did we get to the point with the 20 mill floor that we exempted emergency millage and substitute levy millage from counting against the 20 mill floor?

And I'm thinking, I don't know, maybe it was subconscious, maybe it was conscious.

I wasn't here then, but maybe there was some feeling on the part of the General Assembly when the schools were saying, we've got to have more money.

We we absolutely are strained with trying to deliver our public education services without more money.

And rather than the state write out a check and help out, they basically said, well, we're going to come up with a way where you can generate more money from property tax revenue by exempting these things that that would normally count against the 20 mill for.

So again, yeah, I think there is some of that where the state, you know, is, is avoiding having to, you know, contribute, to solving this problem, but is instead saying that, we want all of the sacrifice.

It's got to be a shared sacrifice.

The state should put up some sacrifice here and help out financially.

And yes, we do probably need some local government reforms, possibly looking at some consolidations or elimination of some overhead and all that.

But it needs to be a shared sacrifice.

I'm seeing too much right now until we get the $380 million put into, House Bill 186.

I haven't seen any effort by the state to do anything in terms of, you know, and you look at where we spending on property tax relief.

In 2010, the state was spending 1.8, $1.7 billion out of our GRF general revenue fund for property tax relief.

Fast forward 15 years later, we are spending $1.8 billion in property tax relief.

What used to be 8% of our general revenue fund budget going to local property tax relief is now down to 4.1% of our general revenue fund.

So so the state has kind of diminished its participation, just as it has in a lot of other thing.

Don't forget, this is at the same time, during the same period when the state eliminated the tangible personal property tax, which was a it was a very important revenue source for our schools and our local governments.

And, they temporarily replaced it with the, Commercial activities tax.

But, that that replacement is pretty much diminished.

So, you know, there's just been a continual kind of weaning away from this partnership, by the state.

And I think, you know, we have to understand that these are critical services that in many cases, we mandate public education, dealing with a community based mental health or a developmental disability system.

And, you know, I think it's imperative for us to, put more skin into the game.

Representative Thomas has a bill that would raise the approval threshold for levies from a simple majority to 60%, saying if a levy is going to affect everybody, then more people should be having buy in on this.

What are your thoughts on that?

Well, we're a majority rule country.

I think we tried something like that in August of 2023 to change the way we, do constitutional amendment.

And that's failed.

Yes.

I think the people have spoken and said, you know, that, again, you know, if you if you just, you know, put those type of, you know, in many cases you just don't see 60% approval rating.

I mean, if you're basically saying that, we're going to do whatever we can, to block passage or block implementation of these things.

Again, I would rather say rather than make it more difficult for local entities to generate the property tax revenue, they need to provide these critical services.

The state should basically generate some revenue on our part to help them, perform the functions, that are critical to a civilized society.

There were $24 billion in property taxes collected last year, according to Policy Matters Ohio.

And there's this effort now to, try to abolish property taxes through this volunteer organization that's, hoping to put it on next year's ballot.

Should lawmakers be talking about what to do if that actually does make the ballot and pass?

Well, I think we're all thinking about it.

I mean, I'm not I'm not, I'm not, I'm not optimistic it or not.

I'm not I'm not pessimistic that I think it will pass.

I think that, because first of all, normally when you get a statewide ballot issue, you've got to have some money behind the campaign to do it.

I don't know who's going to be contributing to a campaign to do this.

Secondly, there's no replacement, revenue stream plan there.

And I think, you know, people are going to be, you know, then probably during the campaign, they're going to be told, you know, this is going to be critical to your local police department, your local fire department, your local senior citizen levy, your your, developmental disabilities programs and things like that.

Now, should the state be, I don't know if the state would be ever be in a position to replace $24 billion in revenue and all that, but I think it's it's something that if the voters if this makes it to the ballot and the voters approve it, I obviously think it's something that that we're going to have to deal with.

But I think in other states where this has been attempted in North Dakota, it failed because they went out and said, what you will probably need is about a 23% state sales tax to replace the revenue that, property taxes generate and all that.

So, you know, I mean, obviously there will be people who just, you know, go in there and, you know, slam dunk a yes vote and say, you know, we need to get rid of this.

But again, I think a lot of it is being caused by the fact that, some of us are calling for property tax relief for a long time, that we've kind of been dragging our feet on this.

So I think we I need I think we need to be able to tell people between now and November of 26, if this gets on the ballot, that we are continuing to work at this problem and we are continue to work at it in, bigger chunks of terms of reform than what happened with 186 and 335. the Ohio House and Senate are both set to be in session the week before Thanksgiving?

So action could happen on property tax related bills?

Each county, that's when property tax bills are due, with some deadlines hitting right after the first of the year.

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, right, is dedicated to bringing inspired legal outcomes to the Ohio business community.

More at Porter.

Right.

Com Porter Wright inspired every day.

You know, Ohio Education Association representing 120,000 educators who are united in their mission to create the excellent public schools.

Every child deserves more at o h e talk.