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Here is an e-mail sent by state Sen. John Eklund to the News-Herald in response to statements from a few public officials and two state Representatives that homeowners are taking on an unfair share of the property tax burden.
Here is an e-mail sent by state Sen. John Eklund to the News-Herald in response to statements from a few public officials and two state Representatives that homeowners are taking on an unfair share of the property tax burden.
Here is an e-mail sent by state Sen. John Eklund to the News-Herald in response to statements from a few public officials and two state Representatives that homeowners are taking on an unfair share of the property tax burden.
Eklund, John <JEklund@calfee.com> Wed, Jun 18, 2014 at 5:15 PM
To: Simon Husted <shusted@news-herald.com> Simon - Ive had a chance to briefly review the summary of the ETPI study and offer the following: 1. Plainly, at least some portion of the changes in sources of property taxes in Ohio over time has been the relatively modest increases in business real property values (compared to residential real property values). I suspect this is, as much as anything, a reflection of what a crummy business climate Ohio had created for itself over the years. 2. No doubt the elimination of the Tangible Personal Property Tax (TPP), has also impacted the changes in sources of property taxes, but bear the following in mind: a. The decision to phase out the TPP (and the schedule on which to do it) was made in the 126th General Assembly (2005). School Districts have had that long to plan and prepare for the eventuality. And, the law provided that districts would be held harmless for any lost revenue from the phase out for a period of time, and then the hold harmless would be phased out. The phase-out of the hold harmless provision was supposed to start in 2011, but the 128th General Assembly (2009-2010) postponed that for another two years (on its way to digging Ohio a structural budget hole of about 8 BILLION dollars). In short, we are finally arriving (albeit late) where everyone has known we were heading for the last 10 years or so. b. Notwithstanding all this, State sources of school revenue for 2015 will exceed 2010 levels, including the almost .5 billion dollars in stimulus money that the prior administration threw at education knowing it was only one-time money. For FY 2015, State General Revenue Fund and Lottery Profit spending for primary and secondary education will exceed FY 2010 funding levels by $1.3 billion, or 17.8 percent. Even including one time federal-stimulus funding, TPP/KwH reimbursements, and property tax relief, FY 2015 funding levels will exceed FY 2010 funding levels by $317.8 million, or 3.3 percent. c. Remember, in the same HB 66 that set elimination of the TPP in motion, Ohio adopted the Commercial Activity Tax - a tax on businesses. That money not only has been used for the Local Government and School District property tax replacement funds, part of it also goes into the general revenue fund and helps fuel the increases in State resources for K-12 education. 3. Business Real Estate, moreover, has seen average millage rates increase by 43.4% compared to an average millage increase on residential realty of 19.47%. My conclusion: Any shift in the property tax mix of funding for schools is old news and not that important (except to the extent it is coming out of the pockets of Ohioans - which makes it important to all of us). More importantly, to set up the shift as being away from business property and on to residential property is misleading - while business personal property taxes may be less of a share of school funding, other business taxes were designed to replace the TPP, and they have been doing a swell job of it - by ignoring this important fact, the study presents less than half the picture.