COLUMBUS, Ohio (WCMH) – Ohio lawmakers are trying to provide property tax relief, but recent changes bring growing problems for school districts and possible millions of dollars in tax hikes.
In June, Ohio lawmakers attempted incorporation To include property tax relief in the two-year budgetBut Gov. Mike DeWine vetoed several provisions, Concerns that the relief wouldn’t be worth it for local schools that rely on tax revenue. Last Wednesday, that The Ohio Senate successfully voted to override it one of DeWine’s property tax vetoes, which prohibits novel emergency, in-lieu and replacement levies starting Jan. 1. For previous coverage of the veto, see the video player above.
Lawmakers supporting the override said words like “replacement” and “emergency” could be misleading, so the change would provide transparency to voters. The change does not affect current levies or the levies on the November ballot, so any relief would be delayed. This decision deprives school districts of options, although fewer options may not equate to fewer levy requests.
Experts fear that the change could still lead to higher taxes. Before 2014, the state automatically paid 12.5% of local property tax bills for school levies before they hit taxpayers. The state legislature eliminated this credit for all taxes introduced starting in 2014. However, the credit for renewals and extensions of levies prior to 2014 was retained. Emergency and replacement levies to which this credit applies will now expire and must be replaced by novel levies to which this credit does not apply.
Without the credit, counties will likely have to charge a higher levy to raise the same revenue as the expiring levy. Bill Seitz, co-chair of the Ohio Tax Group, said the Legislature’s veto override likely inadvertently increased taxes by more than $90 million by not accounting for the credit. He said Ohio needs to pass novel laws to protect the credit or tax bills will rise.
Senate Republican spokesman John Fortney said another expected override would resolve that issue and allow county budget commissioners to adjust levy rates. This override would have to start in the House and indirectly address concerns rather than directly protecting the loan.
School districts rely heavily on local property taxes because Ohio funds schools through a combination of state and local funds. The state uses a convoluted formula to determine how much funding each district should receive, and most remaining costs will be covered at the local level.
This summer, the state continued to exploit the “but” formula. didn’t fully update itwhich the Ohio Education Association argues Underfunding of public schools by almost $3 billion. When districts receive less state funding, they must cut costs or apply for more local funding, typically through property tax levies.
“We believe it is critical for the state to increase investment in workforce-creating education by ensuring that forms of education are fully funded,” said Michael Brown, spokesman for Columbus City Schools.
The now-banned levies accounted for 10% of all school property tax revenue in 2024, according to Howard Fleeter, a researcher and expert at the Ohio Education Policy Institute. Not all school districts exploit these types of levies, but replacement and emergency levies contributed more than $122 million to central Ohio districts last year.
Substitutions are rarer; The Ohio Education Policy Institute found that less than 1% of school levies on the ballot between 2014 and 2023 were replacements.
In the immediate future, the change will have confined impact on most local districts. In a message to families, Bexley City Schools said it is not using these levy types but is watching closely as lawmakers have indicated they could override other vetoes in the coming weeks. Brown agreed that the override will not have an immediate impact on Columbus schools.
“We will be watching to see how the recommendations are translated into bills in the Legislature,” Brown said.
The elimination of tax types is likely the first of several changes to property taxes. After DeWine vetoed it, he appointed a task force to do the job Recommending tax relief changes. This group released its report on September 30th. offers 20 suggested changesmany of these relate to schools.
Lawmakers have also suggested they may try to override other property tax vetoes that districts say could have an even greater impact on cutting funding for schools.
