Blessing Issues Statement on the Recommendations from Joint Property Tax Committee

COLUMBUS— Senator Louis W. Blessing, III (R-Colerain Township) has issued the following statement on the recommendations from the Joint Committee on Property Tax Review and Reform:

This report concludes months of hearings and research. Though not an exhaustive list, it represents a collection of reforms that were important to members of the committee. I want to thank co-chair Roemer for his work and due diligence, as well as the House and Senate staff who were indispensable in this undertaking.

That having been said, in my opinion as a member outside of my role as co-chair and committee member, I have deep concerns with a number of the recommendations. I suspect this is almost universally true for members on and off the committee and for different reasons. This is due to there being two, mutually exclusive philosophies on how to deliver property tax reform.

The first camp, broadly speaking, does not want to spend any state dollars - the locals will bear the burden, or future local revenue will be foregone - and the relief, by and large, must be an across the board cut: if someone gets a 10% property tax break on their $200k home then the same 10% break should apply to someone on their $2M home. The second camp wants to spend state dollars and means-test the relief. Here, local governments and school districts will be held harmless and relief will be targeted to low and middle income Ohioans. In short, the disagreements are over who pays and who benefits. I am in the second camp, and I'll explain why.

Since the majority of local property tax revenue goes to school districts, they will be the most impacted by changes from the first camp. Revenue losses at the local level will have to be made up somewhere, with some combination of more levies, cuts to service, or increased funding from the state. Additionally, the school funding formula seeks to equalize school districts based on wealth, and is why wealthier school districts rely much more on local property taxes than poorer districts. The loss of local school district revenue will likely fall hardest on suburban school districts. Moreover, the historical state and local sharing of responsibility for school funding will be upended, putting more pressure on the state to fill in the gap.

The lack of means testing also means that it will be very expensive and poorly targeted. If you're living in a $2M home, it stands to reason that you're likely in a better financial position to weather inflation than someone in a $200k home. However, a 10% across the board cut means that ten times the amount in real dollars is given to the $2M homeowner vs. the $200k homeowner. Another way of looking at this is that for the same amount of money, ten homeowners at $200k could be given a 15% cut and a single $2M homeowner could be given a 5% cut. I would be remiss if I didn't point out that the lack of means-testing also means that large corporate landlords like Blackstone, Vinebrook, and others will be large beneficiaries of money that would have otherwise gone to our schools and local governments. Do we seriously believe that large property tax breaks to real-estate investors will be passed on to tenants? The answer is absolutely not, and in all likelihood these property tax breaks will be used as leverage to purchase more housing; driving up demand; making housing more expensive; and, by extension, inflating valuations in the long run higher than they otherwise would have been had we done nothing. In short, we'd be spending money to make property taxes go up even further. This is to say nothing of the Constitutional issues that arise from many of these proposals that shift local money around.

This is why state-funded and means-tested solutions are the best options for property tax relief, and are what I'll continue to pursue in the 136th General Assembly. They can be easily paid for by reforming our tax code, as found in SB 342, for example, which entirely pays for the property tax circuit breaker found in SB 271, and do not run afoul of the Constitution. The means-testing ensures that inflationary pressure would be lower; the money is targeted to those who need it most, such as seniors on fixed income; sales tax revenue would go up as lower and middle income Ohioans are more likely to consume than invest; and our schools and local governments are held harmless. That last point needs to be expanded upon as our cities spend a large chunk of their budgets on public safety. Keeping our communities safe is arguably the most important job for which governments are instituted. Though Ohioans definitely want property tax relief, I do not believe that they want it at the expense of their schools and public safety.