LFC Comments: Thanks to our Willoughby lobbyist for this article.
Here is a link to the State of Ohio website listing the Representatives and Senators that are sponsoring this bill. Local Senator Jerry Cirino is on board with this bill. Now if we could just get Cirino and Representatives Jamie Callender and Dan Troy to be concerned about seniors being priced out of their homes because of the ever-increasing property taxes they might just make a difference in the lives of the citizens that they represent.
Commercial property owners, developers could be the winners if Gov. Mike DeWine signs tax bill into law
Updated: Apr. 07, 2022, 12:55 p.m. | Published: Apr. 07, 2022, 11:46 a.m.
COLUMBUS, Ohio –The Ohio General Assembly sent to Gov. Mike DeWine a bill that could shift the burden of school funding more toward homeowners by limiting how school districts challenge commercial property values at boards of revision. (Emphasis added by LFC)
House Bill 126, should DeWine sign it, would change a law that has been in place since 1976 that has allowed school districts to initiate complaints at county boards of revision when they believe properties are undervalued.
School districts, most of which rely on property taxes as their primary source of revenue, often challenge commercial property values, since changes in home values don’t generate a significant amount of tax revenue compared to commercial properties.
But under the latest version of HB 126, which the Ohio House and Senate each passed Wednesday after a conference committee negotiated differences between each chamber’s version of the bill, would make big changes to that practice. Commercial property owners and developers stand to benefit the most from the changes.
Among the changes:
-While school districts would be allowed to continue to file counter complaints when property owners want to lower their values at the board of revision, school districts can only initiate complaints when there has been a recent sale of a property and the sale price was at least 10% and $500,000 more than the county auditor’s value of the property.
-School boards would have to adopt a resolution to allow an attorney to initiate a property value complaint at the board of revision. This would be a change from the last 45 years for most districts when attorneys have just worked with district administrators on which properties to challenge. The bill would also require the school district to send a notice to property owners at least seven days before the school board adopted the resolution, so owners could attend the school board meeting and protest.
-If a school district or other government entity that receives property taxes is unhappy with a board of revision decision, it would no longer be allowed to appeal it to the Ohio Board of Tax Appeals. However, property owners could still allow to appeal board of revision decisions to the Board of Tax Appeals.
-Government entities that receive property taxes wouldn’t be allowed to enter into a private settlement with a property owner to dismiss, not file or settle a complaint. Both Republicans and Democrats in the Senate seemed irked when they learned about the private settlement agreements, since the agreements never seemed to permanently settle a dispute over property value. Some school districts brought up the same complaint a couple years after the settlement expired.
-Boards of revision would have to dismiss an original school district complaint a year after it was filed if there isn’t a decision by then. Current law requires boards to render decisions within 180 days but doesn’t authorize complaints to be dismissed after that time.
Republicans in the legislature said that Ohio’s 45-year-old system is abused by school districts, unusual compared to other states and doesn’t create certainty that business owners need when deciding where to invest.
“This is a fair compromise that balances the interests of property owners, school districts and supports our county auditors in their efforts to establish their property values,” said Rep. Derek Merrin, a Toledo-area Republican who sponsored HB 126 and negotiated the final version of the bill in conference committee.
However, Rep. Beth Liston, a Columbus-area Democrat, said the final bill will shift the burden of funding public schools more onto homeowners.
“This bill is a tax shift, blocking due process for local governments and school districts who are working to ensure fair property taxes are paid by investors and the commercial industry,” she said.
The Ohio School Boards Association’s Will Schwartz said the final bill creates disadvantages to school districts when they’re trying to ensure all property owners pay fair taxes, which makes sure classrooms get what they deserve.
“One of the questions we’ve always asked is who is being protected,” he said. “Is it the taxpayer whose property is now not being challenged as a result of the bill’s new restrictions? Or is it the other taxpayers who are now having subsidize their neighbors’ inaccurate value?”
Commercial property owners, who actively lobbied for the changes said, that some school districts were too aggressive in challenging property values. The attorneys hired to represent school districts are paid on a contingency, so they had an incentive to fight over every high-dollar property.
A group formed called the Coalition for Fair Property Tax Valuations, which included the Ohio REALTORS. Influential groups from Cleveland, such as the Downtown Cleveland Alliance and Doug Price of Northeast Ohio developer K&D Group, were also involved in the fight to disarm school districts.