Ohio moves to tie property tax increases to inflation

"Rising property taxes have sparked fierce recent debate among Ohio lawmakers and citizens. That discourse has included proposals to do away with property taxes entirely, with similar talks talking place in Florida. The two measures House Bill 186 and House Bill 335 address what are known as outside and inside millage. Under the state constitution, counties can levy up to 10 mills, or 1%, in property taxes without voter approval (inside millage). Any taxes beyond that must go before voters (outside millage)."

"H.B. 186 would cap revenue growth from outside millage at the rate of inflation. Lawmakers adjusted the bill after pushback from schools concerned about funding losses. What they're actually losing in terms of less property tax revenue, we backfill that amount to the tune of roughly $360 million from the sales tax holiday fund, said Rep. David Thomas (R), the bill's sponsor. To keep schools essentially full moving forward until their next revaluation."

"H.B. 335, which deals with inside millage, allows counties to replace property tax revenue with local income taxes expanding an option previously limited to local sales taxes. Thomas said safeguards were added to prevent local governments from cutting millage only to restore it later after raising other taxes. On the House floor, supporters argued the reforms were needed to protect homeowners from steep tax hikes linked to rising property values. People are upset with the spikes, Rep. Bill Roemer (R) said. We don't want the spikes 20%, 30%, 40%, 50% increases when people's Social Security might be increasing at 2.9%."

Rising property tax concerns in Ohio prompted two measures: H.B. 186 targets outside millage by capping revenue growth at the inflation rate, and H.B. 335 addresses inside millage by permitting counties to substitute property tax revenue with local income taxes. The state plans roughly $360 million from the sales tax holiday fund to backfill projected school funding losses until the next revaluation. Safeguards were added to deter local governments from cutting millage only to raise other taxes later. Supporters emphasize homeowner protection from sudden value-driven spikes; critics warn the reforms may be insufficient and create local shortfalls.

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