Republicans who control the Ohio General Assembly have called property tax reform a top priority
The Ohio House on Wednesday moved the Republican-controlled legislature’s first property tax bill of the new legislative session.
House Bill 28 won’t make homeowners’ tax bills go down. But it could make it harder for local governments to approve tax increases in the future. Supporters say it will make the state’s system of voted property tax levies easier to understand for voters.
HB 28 would forbid local governments from asking voters to approve what’s called a “replacement” levy. The bill passed on Wednesday by a 62-30. All the “no” votes came from Democrats, although two Democrats – state Reps. Bride Rose Sweeney of Westlake and Chris Glassburn of North Olmsted – joined Republicans in voting “yes.”
The difference between renewals and replacements
Currently, local governments have a few options when a property tax levy is expiring. Two sound similar: “renewals” and “replacements.” Governments also could let the tax levy lapse or seek an “increase,” which is what it sounds like: an actual increase in the tax rate.
Renewal levies don’t increase property owners’ taxes if they’re approved. But replacement levies typically do, since they reset the “reduction factor” that under state law lowers a levy’s effective tax rate over time in response to increases in property values.
HB28’s sponsors, Republican state Reps. Adam Mathews of Lebanon and Thomas Hall of Butler County, have said voters generally don’t understand the difference between renewals and replacements. They said the change would bring more transparency to the tax levy process.
“We have seen the impact of increased property taxes and our constituents have been clear in their desire to see meaningful, systematic property tax reform enacted,” Mathews said. “This is a step toward that.”
“It comes closer to simplifying our overly complex property tax system,” he added.
Local governments fight to keep replacements
The bill has drawn opposition from governments, including fire departments, counties, libraries, school districts and other entities that rely on property taxes. They say it will hurt them financially.
“The problem with this bill is it takes a tool away from local governments,” said state Rep. Dan Troy, a Lake County Democrat.
A Legislative Service Commission analysis suggests that eliminating replacement levies may make it harder for local governments to pass tax increases in the future.
Across the state in 2024, 91% of renewal levies passed. In contrast, 75% of replacement levies passed. A smaller amount yet, 49%, of new levies passed.
The bill now heads to the state Senate. If the Senate approves it, it then would head to Gov. Mike DeWine’s desk for his signature.
