Ohio's property tax rollback gone; may affect success of levies

by MIKE SEVER | RECORD-COURIER REPORTER Published:

Buried in the new state budget is a provision that could make it harder to pass new levies voted on in November's election and beyond.

Legislators took away a combined 12.5 percent property tax rollback on new and replacement levies for local school districts, libraries, mental health agencies and other government agencies. The rollback would still apply to levy renewals.

"Obviously, it's another roadblock" to passage, Superintendent Dennis Honkala of Ravenna said of the higher cost without the state rollbacks.

The Ravenna school district is going to ask for 4.9 mills for continuing operating expenses and permanent improvements. The levy would raise $1.5 million annually.

The levy would pay for building improvements, programs and building safety such as funding another school resource officer.

The last time an operating levy was passed in Ravenna was in 2005. Eight years for an operating levy is "a pretty good run," Honkala said.

It's still early for local districts to discuss the impact of the change. Honkala said he's not heard much talk about the elimination of the rollbacks from other school officials.

"I think everybody's just trying to wrap their arms around it," he said.

Cecilia Swanson, director of the Portage County District Library, said her board hasn't discussed it yet "but they always give careful consideration to any levy request they would put before voters."

"We don't have any immediate plans to go on the ballot," and haven't discussed the implications.

The library has never asked for more than a 1-mill levy, Swanson said, but any increase in money caused by the loss of the rollbacks could make a difference with voters.

Many voters don't realize they have been getting the break in the past. According to the Ohio Department of Taxation, the state reimbursed schools and local governments a total of $1.3 billion in 2012 for the two components -- a 10 percent rollback and a 2.5 percent rollback for homeowners. In Portage County, that amounted to nearly $16.37 million dollars.

GARY Gudmundson, a spokesman for the state tax department, said the rollback was established in the 1970s at the same time as the state income tax.

Supporters of the change say, now that the state income tax is being reduced, it makes sense to reduce the rollbacks.

With the rollback on a 1-mill levy, the owner of a $100,000 home owner would pay $30.63 annually. Without the rollback, that same property owner would pay $35 per year, or $4.37 more, the state tax department said.

There are several renewals on the November ballot that will be unaffected by the state's policy change, including two for the Portage County Board of Developmental Disabilities (2 mills and 0.9 mills), a 1-mill renewal for the Mental Health and Recovery Board and a 2.2-mill renewal for fire protection in Brady Lake.

Brad Cromes, deputy director of the Portage County Board of Elections said the only levy on the November ballot so far that will be affected by the change is an additional 7.95-mill levy for the Lake school district which overlaps into Suffield.

Supporters of the move have defended it as eliminating a contribution from state taxpayers who had no say over the levies. Showing property owners the actual cost of levies will make the system simpler and more transparent, supporters said.

The state budget also includes a change to qualifications for the popular 2 percent homestead tax exemption for senior citizen property owners.

"Next year on the homestead exemption, you will have to show your income is not over $30,000, be over 65 years old, or totally disabled, to claim the exemption," said Portage County Auditor Janet Esposito.

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