Ohio budget update: Lawmakers to eliminate the rollback on new property tax levies
On June 20, 2013
By Scott Williams, OAR Director of Governmental Affairs
As you know, while OAR was successful in eliminating the expansion of the sales tax to real estate-related and business services in the state budget proposal, it has become apparent that Gov. John Kasich and legislative leaders remain committed to including reductions to both personal income and small business income taxes. To accomplish this shared goal, revenues will be needed to offset the cuts.
Late last night we learned that the Ohio House and Senate Conference Committee may issue a legislative tax proposal in the state’s budget bill that includes eliminating the rollback on residential property exclusively on NEW tax levies. All current levies and renewals will still receive the benefit of the residential property tax rollback.
Any school district or local government levy that is currently assessed to a property will still have the benefit of the property tax rollback. This proposal will only go into effect on a newly voted property tax levies.
When a local government or school district successfully passes a renewal levy after the enactment of this legislation, the property owner will still get the benefit of the residential property tax rollback
The Ohio House and Senate Conference Committee leaders maintain that property owners will have the final say on passage of NEW levies and will be made fully aware through ballot language that the NEW levy will not have the residential property tax rollback. Thus, property owners will not increase their property taxes without their vote.
The state is proposing to take the savings resulting from the elimination of the property tax rollback on all NEW levies as a revenue offset for a larger personal income tax cut and small business income tax cut.
The Conference Committee is expected to issue its report later this afternoon and it will include a variety of tax revenue changes in addition to the property taxes. These may include increased tobacco taxes, elimination of some obscure tax exemptions (including possibly means-testing the state’s homestead exemption) and/or credits. Details are not available at this time.
In the event the conference committee does introduce this proposal it will go before the full Ohio House and Senate in a matter of days. Ohio’s budget must be signed into law and balanced by June 30.
OAR is interested in knowing your thoughts on the proposal…so feel free to leave a comment.
Again, this proposal only applies to BRAND NEW levies going forward. All current and renewal levies will still have the benefit of the current property tax rollback.