Ohio Property Tax Reform Work Group nears deadline

COLUMBUS, Ohio (WCMH) -- Ohio's governor-appointed work group has less than two weeks to complete its property tax relief solutions.

The Property Tax Reform Work Group has until Sept. 30 to issue a report with concrete proposals to address Ohio's high property taxes. The 11-person group of politicians, auditors and superintendents must find a way to reduce Ohioans' property tax burdens without bankrupting local schools or public services, which rely on property tax revenue. See previous coverage of the group in the video player above.

Former state Representative Bill Seitz co-chairs the work group and said he and his fellow co-chair, President and CEO of the Ohio Business Round Table Pat Tiberi, will present their recommendations to the rest of the group at a meeting Thursday afternoon. Seitz said the group will flesh out the co-chairs' suggestions and he hopes to come out of the meeting with a consensus of what they will recommend at the end of the month.

Seitz said many of the ideas they've considered are good ones but would likely be too expensive. He said the Ohio Legislature has indicated they will not spend large amounts of money offsetting tax relief plans that require new revenue sources for schools or resources.

Seitz said one idea they are strongly considering is an amended version of House Bill 186, which would limit school districts from increasing property taxes higher than the rate of inflation. The proposal adjusts a complicated property tax law known as the 20-mill floor.

The 20-mill floor ensures school districts receive at least 2% of the total property value within district boundaries. For example, if all of the homes and buildings within a district's boundaries have a total value of $1 billion, then the 20-mill floor ensures that district gets at least $20 million -- 2% -- in property tax revenue.

Although the 20-mill floor protects school funding, it can spike taxes for community members when property values rise quickly. H.B. 186 suggests limiting how much tax revenue schools at the 20-mill floor can take in, ensuring it is at or lower than the rate of inflation. This would prevent dramatic property tax increases, but could lead to schools collecting less revenue.

H.B. 186 recommends using tax credits, calculated every three years for each individual property, to prevent schools from collecting too much money. Ohio school districts are funded by both local property taxes and state funding. Under current law, state funding calculations would not automatically offset funding losses from a tax credit program.

The bill combats that by adjusting how the state calculates financing. It redirects the state formula to reflect when a district runs into the new tax credit cap. This would trigger changes in the state's funding formula to indicate the district needs more state support.

Seitz said the group will also hear suggestions that may provide smaller relief. For example, he said they would discuss giving school districts a bigger say when cities decide to offer developments property tax breaks. Local governments do not always consult school districts when offering tax breaks, costing schools.

"It's easy to give away other people's money," Seitz said.

Seitz said he is "very optimistic" the group will present feasible property tax solutions by their deadline. He said they hope to reach a consensus Thursday so they can use the remaining time to iron out their plan's details and write their report.