June 25, 2025

UPDATE Property Tax Reform in Ohio

House Bill 96 Conference Committee Members met last night to finalize their budget recommendations. The final recommendations that were passed at 1:30AM include many tax reforms. The full language will be available on The Ohio Legislature Website later today: https://www.legislature.ohio.gov/legislation/136/hb96

A few of the property tax provisions that were included last night are summarized below:

Property Tax Levies

Eliminates the authority of political subdivisions to levy replacement property tax levies, beginning with elections held on or after January 1, 2026.
Eliminates the authority of a school district to levy a fixed-sum emergency levy, a substitute
emergency levy, and a combined school district income tax and fixed-sum property tax levy.
Prohibits a school district from submitting any current expense levy to voters if it has a general fund carry-over balance of more than 100% of general fund expenditures in the preceding fiscal year. Modifies the election notices and ballot language for a school district current expense levy to include the percentage and amount of any such general fund carry-over balance. Applies beginning with elections held on or after January 1, 2026. Excludes renewal levies from the prohibition on a school district with a carry-over balance exceeding 100% from submitting any current expense levies to voters. Allows a district to exclude funds to be used within the next three years on permanent improvements from the carry- over balance calculation.
Disallows, beginning for elections held on or after January 1, 2026, a school district or other education-related taxing authority to submit to electors the question of whether to renew and increase an existing levy.
Changes, beginning with elections held on or after January 1, 2026, the term employed in property tax ballot language and election notices to describe the true value of property from "the county auditor's appraised value" to "market value."

Property Tax Reduction Screening System

Creates a statewide screening system administered by TAX to evaluate the eligibility of owners of real property and manufactured and mobile homes that receive the 2.5% owner-occupancy credit or a homestead exemption.
Provides an amnesty from any charges, penalties, or interest in the first year of the system's operation for taxpayers found to be ineligible for a reduction unless the county auditor determines the reduction was procured through fraud, a false statement, or a knowing omission.
Requires, during the amnesty year, tax bills to notify recipients of the homestead exemption or owner-occupancy credit that they are eligible for amnesty if they self- report their ineligibility within that year.
Requires TAX to annually report to the General Assembly the number of properties whose ineligibility was flagged by the system.
Requires potential homeowners be advised of the eligibility requirements for the owner- occupancy credit and of the duty to report subsequent ineligibility prior to signing closing documents.

20-mill Floor Property Tax Limit

Requires that emergency and substitute tax levies be included in the calculation of a school district's 20-mill floor or a joint vocational school district's 2-mill floor for property tax purposes. Applies the millage floor changes to tax years beginning on and after the bill's 90-day effective date. Also includes incremental growth levies, conversion levies, and the property tax portion of combined income tax and property tax levies in the 20- mill floor calculation.
Clarifies that, when a school district on the 20-mill floor levies additional current expense millage or additional millage is otherwise added to the floor, then, for the first tax year it is levied or added, the tax reduction factor must be computed as though the new millage is added to the millage floor.

Property Taxes: County Budget Commission Authority and Procedure

Allows county budget commissions (CBCs) to reduce millage on any voter-approved tax levy aside from a debt levy if the commission finds it reasonably necessary or prudent to avoid unnecessary, excessive, or unneeded property tax collections.
If the tax is levied by a body with a majority of members who are elected local officials, any such reduction is subject to two limitations: (1) CBCs may not reduce a levy such that it would collect less revenue than in the preceding year unless funds are available from reserve balance accounts, nonexpendable trust funds, or carryover amounts to offset a reduction below that level, but the budget commission must consider reserve balance accounts, nonexpendable trust funds, and carryover amounts when considering a reduction. (2) CBCs may not reduce school district levies such that the school district would collect below 20 mills in revenue, except as required to comply with the provision (see TAXCD91) limiting accrual of general fund carry-overs.
Removes prohibitions on CBCs considering the status of reserve balance accounts or other certain unexpended funds when determining whether to reduce a political subdivision's taxing authority.
Requires school districts to obtain approval from the county budget commission before adjusting inside millage in a manner that increases tax rates.
Requires CBCs to offer, during at least one public meeting annually, testimony describing the concept and function of inside millage, how it is allocated to various jurisdictions in the county, and the fiscal impact of inside millage.
Requires political subdivisions to disclose all funds in their control the inclusion of which is not already required by law for annual tax budgets.
Requires all public bodies that levy taxes and that do not submit information to a different body for inclusion in its tax budget to submit tax budgets on their own behalf.
Requires health districts that don't file revenue and expense information for inclusion in another taxing authority's tax budget to file their own.
Requires all taxing authorities that levy property taxes to submit a tax budget that includes an estimate of expenses through the end of the current fiscal year and, when relevant, a stated intent to collect all or some of the projected increased revenue from property inflation or the 20-mill floor.
Places the burden of proof on a taxing authority to show the need for additional revenue when challenging any levy reductions made by the CBC before the Board of Tax Appeals (BTA).
Transfers the responsibility of annually adjusting the rate of fixed-sum levies from county auditors to the Tax Commissioner and requires auditors to apply the adjusted rates.
Requires CBCs to reduce levy rates when a taxing authority forgoes increased revenues due to property inflation and prevents school districts from losing state funding for forgoing revenue.
Allows school districts to submit projections of revenue and expenses with their tax budgets.
Requires CBCs to consider a school district's submitted projections of revenues and expenditures when reviewing the district's tax budget.

EMAO shared the following letter with Members of the Ohio General Assembly: EMAO HB335. We encourage EMAO members to continue to reach out to members of the Ohio Senate and Ohio House of Representatives and share how tax reforms will directly impact your department and the communities you serve. Please access the link below to find your state senator and state representative:

https://www.legislature.ohio.gov/