Ohio seniors could see more savings under bill increasing homestead tax exemption
State lawmakers want to give disabled Ohioans and low-income seniors 65 years old or older additional help when it comes to paying property taxes.
A bill introduced late June by Reps. Jeff LaRe, R-Violet Township, and Jason Stephens, R-Kitts Hill, would increase the homestead tax exemption every year according to inflation.
"One of the biggest enemies for those who live on fixed income is inflation," LaRe said at a Tuesday news conference. "This bill will help them fight the impact of increasing inflation and save money for these property owners."
Currently, low-income seniors and residents with disabilities can reduce their homes' market values for taxing purposes, exempting the first $25,000. Disabled veterans can exempt the first $50,000.
In 2014, lawmakers re-imposed an income test for homeowners to qualify for the exemption. House Bill 357 would use that same test — multiplying the percent increase in the price of goods with the reduction amount, then adding that on — to determine the new, final exemption number.
While year-over-year savings may not be significant, with inflation usually projected to be around 1% to 3% yearly, the amount can add up over multiple years. A recent nationwide survey showed consumers fear inflation could hit up to 4% a year from now.
"The adjustment each year will be relatively small. But for those who are most disadvantaged by inflation, such as those living on a fixed income, the benefit, over time, will be significant,” said LaRe.
As for the cost on local governments and school funding, Stephens said there was no need to worry.
"I have seen first-hand as a former county auditor the great relief that the homestead exemption provides for senior and disabled veteran homeowners,” he said. “This change in law would be easy for county auditors to administer and would have no impact on school funding or other local government funding.”
That's because the state reimburses that amount to local entities. According to the fiscal note, Stephens said, the impact on the state budget would be $4 million in fiscal year 2022 and $12 million the following year.
A similar bill was also introduced last session, but it didn't advance much due to other issues like COVID-19 being prioritized, he said. But he noted that it had "garnered a lot of support," including from the County Auditors' Association of Ohio.
"As time passes with no change to the value of the exemption, the effect of this critical exemption declines," said Franklin County Auditor Michael Stinziano, a Democrat, on behalf of the association.
Lawmakers are currently on summer break, so any action or hearings on the bill will have to take place when the legislature returns in the fall.
Stephens said he's also looking at several different proposals to combat property taxes down the line.
"Property taxes have been on the rise in almost every county in Ohio for several years," he said. "We want to see, number one, what's easy to administer... and we also want it done in a way that's fair to our local governments."