by Nicole Piscitani • Jan. 25, 2024
The Ohio Joint Committee on Property Tax Review and Reform held its second meeting and focused the discussion by inviting the Ohio Board of Tax Appeals and four auditors from the County Auditors' Association of Ohio (CCAO). The county auditors who participated in the discussion were:
- Andrea Weaver, Union County auditor
- Jill Davidson, Athens County auditor
- Ronald O'Leary, Cuyahoga County Board of Revision administrator
- Michael Stinziano, Franklin County auditor
The CCAO members focused their testimony on explaining the appraisal process and standards, board of revision process, public utility property, Current Agricultural Use Program (CAUV), Ohio Forest Tax Law and real property exempted from taxation. Additionally, the auditors offered insight into the complexities of these topics and provided examples of issues they have witnessed during their time serving as county auditors.
Sen. Louis W. Blessing III (R-Colerain Township) centered his questions around tax abatements and exemptions, including “drop-down” LLCs, in which property changes hands by way of the sale of an LLC that owns the property. The LLC not only avoids paying the conveyance fees but also leaves the auditors without accessible sales data to use in valuations. Stinziano provided the following response: “The lack of sales data makes it more difficult for auditors to do their jobs; the law is silent as to these scenarios, so it would be helpful for lawmakers to provide clarity.”
Blessing also expressed concerns about the housing supply, sharing his hesitancy to pursue broad property tax relief until addressing this issue. He said, "I think it's important to note that it would actually make things, at least in my mind, significantly worse, and it would be at the expense of local governments, absent housing reform and a marked increase in supply. What has been left unsaid is that it will be a boon for investors and corporate landlords ... a bunch more money would be dumped into a system with a relatively fixed supply of housing, which means real estate prices will go up, which is the exact thing that got us into this situation."
The Joint Committee on Property Tax Review and Reform will continue to meet in February with potential witnesses from the business community and public education.
In addition to the Joint Committee on Property Tax Review, the Senate Ways and Means committee held proponent testimony on Senate Bill (SB) 186, sponsored by Blessing and Sen. Catherine D. Ingram (D-Cincinnati). The bill would require, upon the transfer or subdivision of property, the seller, or the owner in the case of a subdivision, to pay to the county auditor the estimated current taxes on the property for the year, along with all delinquent taxes on the property. The bill’s provisions would not apply to property if the state or any political subdivision of the state is the property’s buyer, seller or owner. Additionally, the bill would prohibit the transfer of property sold at a tax foreclosure sale unless the purchaser supplies an affidavit stating that the purchaser or certain related parties do not own tax-delinquent property in the state or that such delinquency is justified or erroneous.
During proponent testimony, several county treasures testified and described situations that had occurred in their counties in which individuals tried to get around paying delinquent taxes by selling properties or forming new LLCs with each property purchase. Blessing questioned the witnesses on additional provisions that could be added to the bill that would further prevent these kinds of actions from occurring.
Lastly, the House Ways and Means committee held a third hearing on House Bill (HB) 344, sponsored by Reps. Adam Mathews (R-Lebanon) and Thomas Hall (R-Madison Township). The bill would do the following:
- eliminate replacement property tax levies;
- modify the requirements governing when political subdivisions can file property tax complaints and counter-complaints;
- expand a prohibition on political subdivisions appealing property tax complaint decisions to include appeals under an alternative statute;
- impose a monetary penalty on subdivisions that fail to comply with property tax complaint filing requirements.
Opponents of the bill, from various levy taxing authorities, mostly focused their testimony on eliminating the replacement tax levy. OSBA testified as an opponent of the bill, delivering remarks on the elimination of the replacement levy and the changes to the Board of Revision process. One argument made in OSBA’s testimony was the following: “HB 344 would create an undue burden and cost on school districts to prove that they were not involved in the filing of a complaint by a person acting on behalf of the school district. This essentially creates a process that requires a school district to prove that they were not involved in all complaints filed. The fact that an individual files a complaint should not necessitate that a school district incurs legal fees to prove that they were not involved or be a risk for paying a penalty if they fail to respond.”