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Two Republican Ohio lawmakers are touting the inclusion of homestead tax exemption changes in this year’s budget and promising to work on future tweaks as well. Reps. Thomas Hall, R-Madison Township, and Steve Demetriou, R-Bainbridge Township, joined a pair of county auditors Wednesday to explain how the exemption will respond to inflation going forward.
Hall and Demetriou initially filed those changes as House Bill 57. The measure passed the House easily, and budget negotiators were able to incorporate the bulk of that proposal in the final spending plan. But HB 57 hasn’t gone away, and the sponsors argue it could be a vehicle for further changes in the Senate.
They also pointed to a new Joint Committee on Property Tax Review and Reform created in the budget. That panel will hold hearings and deliver a report with recommendations by the end of this year.
Homestead changes
Ohio’s homestead exemption cuts property tax bills for low-income seniors and disabled residents by reducing the amount of their home’s value that’s subject to property taxes. The standard exemption reduces taxable value by $25,000, and disabled veterans get an exemption of $50,000.
So for example, a resident claiming the exemption who owns a $100,000 home would pay taxes as if their home was worth $75,000 or $50,000 respectively.
Lorain County auditor Craig Snodgrass explained, “currently it saves a lot of our seniors about $400 to $500 a year in taxes.”
While those savings are important, fellow auditor David Thomas from Ashtabula County noted they haven’t exactly kept up with Ohioans’ bills.
“I was in middle school in 2007,” he said, “and that’s the last time we’ve seen an increase.”
The changes included in the budget will tie those $25,000 and $50,000 exemptions to inflation. In successive years the dollar amount will likely climb to keep pace with rising costs.
But those changes would mean less money flowing to local governments for services like school and libraries. To make up for it, lawmakers plan to reimburse the lost revenue. State economists estimate that would cost $11 million in the 2024 fiscal year and grow to $28 million in 2025. Because of the timing of the bill’s passage, only half a year of expenses is reflected in fiscal projections.
“This legislation by no means is the end all, be all, fix all, for homestead or for seniors or disabled veterans,” Hall explained. “But I assure you this is the first step.”
Further changes?
In addition to indexing the homestead exemption to inflation, the state budget stands up a committee to propose further changes to Ohio’s property tax system. The ten-member panel includes five members from each chamber, with the majority appointing three and the minority the remaining two.
“If you leave and don’t hear anything else, this is just the first step,” Hall insisted. “We hope to continue the reform efforts. We hope to have more conversation about property tax, and we hope the committee produces a really good list of property tax reforms we can actually enact and move forward with.”
Outside of that committee Demetriou added “House Bill 57’s now in the Senate.”
“So as it moves through that process in the Senate,” he explained, “our hope is that we can make it even better outside of the language that got into this past operating budget, and that we can enhance and maybe tackle some things.”
One example he mentioned was raising the personal income ceilings, particularly for those on a pension. Another idea would create tiers to include vets that aren’t totally disabled.
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