Speaker 1: Don't want to be an American idiot. Scott's flown back
Speaker 1: on seven hundred WLW. Governor Mike Dewin's Property Tax Reform
Speaker 1: Working Group was tasked with coming up with a better system.
Speaker 1: Let's face it, property taxes in Ohio have been a
Speaker 1: mess for a while now. We've seen taxes rise anywhere
Speaker 1: between what thirty to two hundred percent in some areas,
Speaker 1: and that worries folks, especially seniors on fixed incomes, may
Speaker 1: lose their People are actually worried about losing their homes
Speaker 1: over it. The same time, we have to fund schools,
Speaker 1: police fire ems, all those services. And by the way,
Speaker 1: the day after these proposals got released, the Ohio Senate
Speaker 1: voted to override Mike Dewina on this bill. Sites is
Speaker 1: the co chair of the working group and joins the
Speaker 1: shout now on seven hundred WWD former Green Township, Ohio
Speaker 1: House Minority Speaker bill. This was when we talked about this,
Speaker 1: I think a few months ago, when you were assigned
Speaker 1: the task of co chairing this, this working group said this,
Speaker 1: this probably could be one of the most difficult things
Speaker 1: you've ever endeavored to do. You laid out twenty ideas
Speaker 1: the Ohio Senate voted to override explain, first of all, Bill,
Speaker 1: what does that mean and the reasoning behind it? And
Speaker 1: is it simply just that you leaned, as the working
Speaker 1: group leaned towards more the House bills and the House
Speaker 1: proposals for the fixed than the Senate bills? And is
Speaker 1: that all this is?
Speaker 2: No? No, no, no, not at all. No. No. Both
Speaker 2: the House and the Senate have already passed the number
Speaker 2: of things about the governor vichos, and now the House
Speaker 2: and Senate are considering overriding the governor on some of
Speaker 2: those beatos. The one that was overridden last week abolished
Speaker 2: replacement levey le we we're.
Speaker 1: Losing we're losing your cell a little bit there, Bill,
Speaker 1: Can you hear me?
Speaker 2: Yeah?
Speaker 1: I got you, hear me, I got you?
Speaker 2: Okay. They abolished the emergency, they abolished substitute, they abolished
Speaker 2: replacement levees, and and and we didn't have too much
Speaker 2: problem with that, because replacement levees confuse voters replace it
Speaker 2: with what substitute levees confused voters substitute for what emergency
Speaker 2: levees have been abused. There's emergency levees that have remained
Speaker 2: in effect for over ten years. That's not an emergency,
Speaker 2: so we don't have a problem with that. But we
Speaker 2: did recommend that we redefine emergency levees, allow them to
Speaker 2: exist for no more than five years, limit them to
Speaker 2: school districts that are about to go into fiscal watch
Speaker 2: or fistal emergency, and acts of God, you know, things
Speaker 2: like floods and tornadoes. Restrict it strictly to that. That's
Speaker 2: one thing we recommended. The other thing that the legislature
Speaker 2: in their zeal to override the wine on this for
Speaker 2: God is there is a law that passed in twenty thirteen.
Speaker 2: I was very involved with it that says that we
Speaker 2: will only pay the twelve and a half percent credit
Speaker 2: on your property tax for levees that were passed before
Speaker 2: twenty thirteen and levees that were renewed after that time.
Speaker 2: Of those levees, well, when you abolish these levees, you're
Speaker 2: cutting off the right of the folks to get there
Speaker 2: twelve and a half percent on those levees that predated
Speaker 2: twenty thirteen, and that results in a ninety six million
Speaker 2: dollars state wide tax, which is not what the legislature
Speaker 2: probably intended. So they're going to have to fix that,
Speaker 2: I think down the road. But let me take a
Speaker 2: step back spot, because people need to understand something. The
Speaker 2: number one problem here is that real estate values have
Speaker 2: greatly outstripped the general rate of inflation. Your wife is
Speaker 2: in real estate. She knows that like the back of
Speaker 2: her hand. And normally that's not much of a problem
Speaker 2: because a nineteen seventy six law says that for most
Speaker 2: voted levees, when a levee passes in all the millage
Speaker 2: backs as values increase, so that the levee produces no
Speaker 2: more money in the current year than it did in
Speaker 2: the year in which it was originally passed. That's true
Speaker 2: for most levees, but there are two kinds of property
Speaker 2: tax levees that don't have that feature. One is, in
Speaker 2: our constitution, each county gets ten mills of unvoted millage
Speaker 2: to divide up among their schools, cities, township counties. That's
Speaker 2: unvoted millage, and that does go up as property values increased.
Speaker 2: The levee money goes up in lockstep with those valuation increases.
Speaker 2: That's one one problem. The other problem is schools are
Speaker 2: when they collect fewer than twenty mills of taxes for schools.
Speaker 2: All of those mills under twenty mills grow in lockstep
Speaker 2: with property value increases, and once you get over twenty mils,
Speaker 2: none of the mills grow with inflation. So schools have
Speaker 2: an incentive to try to stay below that twenty mils.
Speaker 2: But and when they do again, all of that millage
Speaker 2: grows with increasing property valuations. We in the House and
Speaker 2: the Senate seem to be on pretty much the same
Speaker 2: page about one good idea to deal with that, and
Speaker 2: that is to say, when when property values increase at
Speaker 2: a rate faster than the general rate of inflation, the
Speaker 2: general rate of inflation will service a cap on the
Speaker 2: extent to which those higher property values may be reflected
Speaker 2: in your tax bill, so that if inflation is five percent,
Speaker 2: the property night go up fifteen perca, they would be
Speaker 2: capped at five per sack. That is a bill called
Speaker 2: House Till one eighty six, and we endorsed that in
Speaker 2: the form in which it existed in June. It hasn't
Speaker 2: passed yet, but just a week or two ago they
Speaker 2: mended it in the House and tried to reach back
Speaker 2: and claw back from the schools one point seven billion
Speaker 2: dollars that the schools had collected and spent over the
Speaker 2: years twenty two, twenty three, twenty four and twenty five.
Speaker 2: And we haven't taken a position on that, but obviously
Speaker 2: that's posed of the grave degree of problem for the schools.
Speaker 2: I mean, they lawfully collected the money, they lawfully spent
Speaker 2: the money. Why are they being made to pay this
Speaker 2: back to the property owners, even though the property owners
Speaker 2: I'm sure would love it. So that is the fundamental problem.
Speaker 2: Now you hit on something else that's very important. Senior
Speaker 2: citizens in particular are having a hard time because their
Speaker 2: house is paid for, they've got no kids in schools anymore,
Speaker 2: they're on a fixed income, and they're being hit with
Speaker 2: these property tax increases. Well, there's really only three things
Speaker 2: that you can do to help those needing people. You
Speaker 2: can either expand the existing state homestead exemption, which allows
Speaker 2: folks to exempt part of their valuation from taxes. Or
Speaker 2: you can come up with a tax deferral plan, which
Speaker 2: some states do, which says you can defer payment of
Speaker 2: some of those taxes until you die or until you
Speaker 2: sell the home. Okay, that's the second thing you can
Speaker 2: do to help those needing people. And then the third
Speaker 2: thing you can do is pass something called a circuit breaker,
Speaker 2: which says that when your property tax exceeds a specified
Speaker 2: percentage of your income, you don't have to pay any
Speaker 2: more than that.
Speaker 1: Percentagetcha, Okay, Now, thirty.
Speaker 2: States have done a circuit breaker, Ohio has not. In
Speaker 2: our recommendations, we recommended a modest expansion of the home
Speaker 2: set exemption. We recommended initiation of a modest tax deferral program.
Speaker 2: We also threw in a recommendation that when the state
Speaker 2: feels like they can afford it, they should consider a
Speaker 2: broader exemption of the homestead or expansion of the homestead exemption,
Speaker 2: and they should consider adoption of a circuit breaker. The
Speaker 2: state legislature, my friends and colleagues, and the legislature, they
Speaker 2: don't want to spend any state money on solving this problem.
Speaker 2: And their attitude is, Hey, we're paying the twelve and
Speaker 2: a half percent credit on levi's the past prior to
Speaker 2: twenty thirteen and renewals thereof, and we're paying for the
Speaker 2: existing homestead exemption, and we're not getting any credits for
Speaker 2: that from the voters, So why should we spend more
Speaker 2: state money on it? Well, I understand that point, but
Speaker 2: again I'm concerned about those senior citizens. And you can say, well,
Speaker 2: let the county do it on their dime. Well, the
Speaker 2: problem is not all counties in Ohio have the financial
Speaker 2: whereboom to do that, right, That's why it should be
Speaker 2: done at the state level. Okay.
Speaker 1: He is Bill sites on the show as Marcelonia on
Speaker 1: seven hundred. Well, they're very complicated but important issue of
Speaker 1: property tax reform. He is a co chair of the
Speaker 1: working group test by the governor to come up with
Speaker 1: a plan twenty main recommendations here and certainly can't get
Speaker 1: to all twenty and all twenty and not all twenty
Speaker 1: are not out in the weeds. The number of these are.
Speaker 1: And we're talking about the important facets, the fact your
Speaker 1: bottom line. You know, you mentioned seniors and okay, I
Speaker 1: no seniors, fixed income and people are afraid they're going
Speaker 1: to lose their home that they've raised, their family and
Speaker 1: et cetera. But at the same time, it feels like
Speaker 1: a lot of this comes at the expense of young
Speaker 1: people with kids. We hear about seniors and fixed incomes.
Speaker 1: We never hear about young people going, Hey, what about
Speaker 1: some a couple that has to work two jobs or
Speaker 1: more three or four jobs between the two of them,
Speaker 1: and daycare costs. And you know, we look around the
Speaker 1: country and wonder why we are not replacing old with young.
Speaker 1: You know, young people are not having families and having
Speaker 1: kids anymore, largely because they can't afford them. Doesn't this
Speaker 1: further exacerbate that. I understand the need that seniors have,
Speaker 1: but often in politics and we don't talk about younger families,
Speaker 1: which we really need to drive the economic engine and
Speaker 1: also support us an old age. If fewer people are
Speaker 1: having kids, that's bad for seniors overall.
Speaker 2: Yeah. Well, you know, you make a very good point,
Speaker 2: but every time you try to expand the pool of
Speaker 2: people who should be getting property tax relief, you're dramatically
Speaker 2: increasing the cost. And those younger people do have the
Speaker 2: ability still to work.
Speaker 1: That's a problem with subsidy, right, Okay.
Speaker 2: I mean, you know, obviously, property taxes have been around
Speaker 2: in Ohio since the eighteen thirty They account for twenty
Speaker 2: three point nine billion dollars a year. All of that
Speaker 2: goes to local government services. Only the state gets zero
Speaker 2: from property taxes. And to abolish property taxes as there
Speaker 2: is a move of what to do to a still
Speaker 2: advised constitutional amendment to abolish them would mean we would
Speaker 2: need a ten point two percent statewide flat income tax
Speaker 2: if we wanted to replace property taxes income right or
Speaker 2: a or a statewide sales tax rate of about twenty percent,
Speaker 2: which is neither of those are remotely feasible. And so
Speaker 2: people need to consider before you jump on the bandwagon
Speaker 2: and say I don't want to pay any more property taxes. Right, well,
Speaker 2: either you're going to put every local government out of business,
Speaker 2: which is not a good idea. Your school's out of business,
Speaker 2: or you're going to have to have some replacement source
Speaker 2: of revenue that is probably worse than the property tax
Speaker 2: that you're paying now. I mean, a twenty percent statewide
Speaker 2: sales tax would kill the economy in Hamilton County. Everybody
Speaker 2: would drive over the river to Kentucky to buy every share.
Speaker 1: Sure, absolutely absolutely. I will also point out there's other districts,
Speaker 1: I know, Kings and many others are moving towards just
Speaker 1: going hey, you know what, we're just gonna We're going
Speaker 1: to propose a one percent or whatever the percentage is,
Speaker 1: let's say, uh income tax, and you know that absolves
Speaker 1: people who aren't working unless retirees are close to retirement
Speaker 1: from paying that sharing that burden. So, and you know
Speaker 1: in lou of this too. One of the things we're
Speaker 1: looking at is just saying, okay, well, property taxes are
Speaker 1: a mass, why don't we just get our money from
Speaker 1: income taxes?
Speaker 2: Well, schools, you know, and schools have the ability to
Speaker 2: place before their voters and income tax. That's been around
Speaker 2: for a number of years now, and a number of
Speaker 2: school distis have done it. Perhaps that is a somewhat
Speaker 2: viable for schools. But townships they have no ability to
Speaker 2: do income tax. Libraries have no ability to do that.
Speaker 2: The zoo is no ability to do that. Your mental
Speaker 2: health and developmental disabilities services don't, your senior citizen services don't.
Speaker 2: So the income tax for schools is a partial solution
Speaker 2: and one that might be looked at because remember, we
Speaker 2: have reduced the state income tax over the last twenty
Speaker 2: five years from north of seven percent down to the
Speaker 2: current level of two point seven five percent. We have
Speaker 2: the lowest state income tax rate of any of our
Speaker 2: sister states here in the Midwest. And so because state
Speaker 2: income tax have gone down, maybe maybe the voters in
Speaker 2: these school districts might buy it's propitious to have a
Speaker 2: local income tax. Personally, I think income taxes are worth
Speaker 2: some property taxes. But that's just me, okay, you know,
Speaker 2: and we have to consider that it's not a complete
Speaker 2: solution for the reasons I just gave so many jurisdictions
Speaker 2: dependent on property tax cannot do an income tax, and frank,
Speaker 2: they don't want to. We are doing township no interest
Speaker 2: in doing an income tax when I was on that
Speaker 2: board for seven years in the nineties.
Speaker 1: Bill Sides one. One final question here on the on
Speaker 1: the Budget Commission powers. We talked about the Budget Commission
Speaker 1: to come in and that they balance committee. They they
Speaker 1: have the authority to reduce what are you calling unnecessary
Speaker 1: excessive levees, uh with respecting voter intent, But these are
Speaker 1: the local We talk about local control all the time.
Speaker 1: This is the ultra localis definition of local control is
Speaker 1: that voters approve these levies specifically because they trusted the
Speaker 1: taxing entity's assessment of need. How do you balance that
Speaker 1: with what's happening here?
Speaker 2: Well, what we've done, Okay. The legislation that the General
Speaker 2: Assembly passed said that the Budget Commission, consisting of the
Speaker 2: county Treasurer, the county auditors, and the county prosecutor can
Speaker 2: reduce the millage of any levee that they find to
Speaker 2: be unnecessary or accessive. They never defined unnecessary, they never
Speaker 2: defined accessive. That means you could have eighty eight different
Speaker 2: standards across the eighty eight different counties. They also said
Speaker 2: they also failed to say that the Commission has to
Speaker 2: keep hands off at least for a period of time
Speaker 2: after that levee is passed by the voters, because to
Speaker 2: do otherwise is basically to flap the voters right in
Speaker 2: the face saying you were too stupid to vote for
Speaker 2: We're going to undo what you just voted for. And
Speaker 2: so what we did on our task force is we
Speaker 2: came up with a good type definition of unnecessary and
Speaker 2: a good definition of excessive in both cases, provided by
Speaker 2: our County Auditors Association statewide, and we said the Budget
Speaker 2: Commission cannot reduce levees for the first five years after
Speaker 2: they initially passed, or for the first two years in
Speaker 2: the case of renewal. And so there'll be that poling
Speaker 2: off period, because how wealth are you going to know
Speaker 2: whether it's excessive or unnecessary until it plays out, see
Speaker 2: what I'm saying. So we're trying to again, this is
Speaker 2: an example spot of where we're trying to refine what
Speaker 2: the legislature has done. We're not trying to say forget it,
Speaker 2: don't do it. We're simply saying, there's going to be
Speaker 2: a few bells and whistles, a few guardrails around these
Speaker 2: new and expanded powers of three county wide officials to
Speaker 2: exercise control over school levees and township levees and park
Speaker 2: levees that they have nothing to do with. So you know,
Speaker 2: we're just trying to balance that against the will of
Speaker 2: the voters, is what we're trying.
Speaker 1: And that that is indeed the billion dollar question because
Speaker 1: something to listen, this is going man. There's a lot
Speaker 1: of moving parts at bill sites laid out and eloquently
Speaker 1: of course, as always too, but lots we don't understand.
Speaker 1: And I'm hoping that gets sorted out during a debate
Speaker 1: on both sides of this in the Senate of the House,
Speaker 1: and the Governor's going to have a say in this
Speaker 1: thing too. So what is the timeline before this shakes out?
Speaker 2: Well, I know the House and Senate our team to
Speaker 2: do something definitive before the end of the year. There
Speaker 2: is nothing that can be done that would provide any
Speaker 2: relief prior to the second half twenty twenty six property
Speaker 2: tax bills. That's just a matter of timing. You can't
Speaker 2: do anything. I would my focus would be how do
Speaker 2: we fix the system going forward rather than trying to
Speaker 2: recreate history by going backward. Yeah, and so you know,
Speaker 2: I mean, is this a problem, yes, and we should
Speaker 2: fix it going forward. And that was what our group recommended.
Speaker 2: Mostly of our recommendation, we had a great group. It
Speaker 2: was a county auditors, it was school superintendents, the county commissioners,
Speaker 2: county treasurer, you know, we had the mayor, We had
Speaker 2: a mayor in there, a couple of business people in there.
Speaker 2: So it was a good balanced group of people that
Speaker 2: actually are in charge of implementing the whole property tax system.
Speaker 2: And so their expertise really was great and guided us
Speaker 2: very very strongly in the work we did. We met
Speaker 2: every week for two months, every Thursday, for at least
Speaker 2: two hours at a time, and heard from a lot
Speaker 2: of folks that got a lot of written testimony, a
Speaker 2: lot of oral testimony, and did our best away through it.
Speaker 2: On that very short timeline that Mike DeWine gave us.
Speaker 2: He gave us till September thirty.
Speaker 1: Yeah, you and turn that in. What's going to happen
Speaker 1: now is the great debate will continue here in pieces
Speaker 1: of this and we'll get debated and I'm sure we'll
Speaker 1: discuss this in the future too. But yeah, it's been
Speaker 1: an interesting few months for you, I know, co chairing
Speaker 1: this group. Anyway, he's built sites of Green Township. Thanks
Speaker 1: again for coming on the show, appreciate it.
Speaker 2: Happy to be with you. Better.
Speaker 1: I'm working on that. You work on the property tax
Speaker 1: how's that?
Speaker 2: Yeah? There you go? All right.
Speaker 1: I gotta feel in my foot it's going to be
Speaker 1: better before we figure out property taxes. That's your damn sure. Anyway, Well,
Speaker 1: let's get a news update in. Did that confuse you?
Speaker 1: Probably did. It's a lot going on there and a
Speaker 1: lot of millages and uh clawbacks and levy structure changes
Speaker 1: and words like unnecessary and excessive kind of makes your
Speaker 1: head swim. But the good news is this will get
Speaker 1: that parceled out in pieces and will debate each each
Speaker 1: element of this at some point to figure out why
Speaker 1: property taxes are so screwed up, and how we can
Speaker 1: get some sanity back to what we pay Scott's Loan
Speaker 1: Show seven hundred ww