County property tax credit increase lowers burden for taxpayers, impacts schools, municipalities

A boost in property tax credits for eligible homeowners will cost $17.4 million in income from agencies, schools, townships and cities coffers next year. On Tuesday, Lorain County Commissioners voted unanimously to double the owner-occupied and homestead property tax credits for eligible homeowners, a move allowed under the biennial state budget bill passed in June. The change is effective for the 2025 tax year for real property, which will be collected in 2026, and the 2026 tax year, which will collected in 2027, for manufactured homes in Lorain County. On Friday, Commissioner Dave Moore, a Republican, said he had never received so many positive phone calls since getting into politics than he had over passing the credit increase. The homestead exemption reduces the amount of a property's taxed valued by $28,000 for homeowners 65 and older and disabled individuals or by $56,000 for disabled veterans and surviving spouses of first responders. The state reimburses schools, counties, townships and others funded by property taxes for the standard homestead and owner-occupancy exemptions, but will not reimburse the additional amount passed by the commissioners on Tuesday. The increase approved Tuesday would double the homestead exemption to $56,000 for elderly and disabled homeowners, and $112,000 for disabled veterans and surviving spouses. There are just under 20,000 homeowners enrolled in the homestead exemption program, which, along with the owner-occupancy credit, must be applied for with the county Auditor's Office. The owner-occupancy credit reduces homeowners' property taxes for the house they reside in by 2.5 percent. The increase boosts the reduction to 5 percent. "For two years, all I heard was 'property taxes,'" Moore said. "... When the state of Ohio gave me the opportunity to do something, I did it." The exemption increases do not have a built-in end date. Auditor explains impact According to estimates by Lorain County Auditor Craig Snodgrass, the increased owner-occupancy credit would see $8.2 million in property tax reimbursements on owners' bills next year, and $9.1 million for the homestead exemption. Snodgrass, a Democrat, said he was not part of the commissioners' discussions about the exemptions. On Thursday he provided The Chronicle-Telegram with a breakdown of the estimated reimbursements based on the increased homestead and owner-occupancy credits passed earlier in the week. The hardest hit are several school districts in the county, which will see more than $1 million lost in anticipated tax revenue next year. Moore did not consider the change lost revenue for districts. He said it was an adjustment to the "excessive, unvoted on property tax increase" caused by the increase in property valuations last year. In 2024 residential property values rose an average of 31 percent under a mandatory reappraisal process that takes place every six years. Homeowners began paying taxes on those new valuations this year. Snodgrass said if a homeowner previously received a $400 homestead reduction on their property taxes, the increase will see them receive $800 total — with $400 of that still reimbursed to the county or subdivisions by the state. He noted school districts have built much of these funds into their budgets already and now, halfway through their fiscal year, it is changing. The county's shift, alongside state funding losses and other changes, have put schools under assault, he said. "These are all these nickel-and-dime programs and, hey, it's a great deal for the individual homeowner, taxpayer but there's also always cause and effect," he said. "And right now, and it's been for years, the schools are under assault and this is just another way its taking money from their budgets and it's decimating them." He said the majority of homeowners' property taxes fund local schools — meaning they took the biggest hit in the commissioners' exemption increase. The change will not be an immediate funding loss, he said. It will be split between the settlement distributions sent from the county to local schools and others after homeowners pay the first and later the second half of their property taxes next year. "I understand the taxpayers' plight — values are skyrocketing, it is a post-COVID phenomenon that I don't think anybody really could anticipate, but things haven't been addressed along the way to fix the problems," Snodgrass said. "So its this perfect storm coming together all at once and now they're all rushing to create legislation to make it look like we have some taxpayer relief." Schools will be hit hardest Columbia Schools Superintendent Graig Bansek understood how the additional revenue from increased taxes caused by increased property values could look like additional revenue, but said the issue becomes school districts have already incorporated those funds into their three-year forecasts submitted to the state. His district anticipates losing about $400,000 in anticipated property tax revenue, he said. "There is nobody that understands more than me that we need property tax reform," Bansek said. "But we also have to understand that 20 years ago, 70 percent of public education (funding) was picked up by the state. Today, 70 percent is now picked up by the taxpayers — this is not a schools problem, this is a legislative problem." He said he understood why the commissioners increased the credits as a way to help senior citizens and residents on fixed incomes, but called for a lasting solution and level of tax relief agreed on by the county, schools and state legislators. Lorain Schools Superintendent Jeff Graham shared some of Bansek's concern. His district is expected to lose about $1 million in property tax revenue from the exemption increases. "We lost federal funds, the state told us we were going to get $4.1 million more than they gave us and now the county is trying to take money away from us," he said. "So I'm not sure how that all gets offset." Others also will feel the pinch Lorain city Auditor Joseph Koziura, a Democrat, said the homestead and owner-occupancy increase cannot be labeled as tax relief, as property tax relief would do no harm to the subdivisions relying on those funds. He said the changeaffects schools, libraries, townships, Lorain County Public Health, the county Board of Developmental Disabilities and others. "I'm sure there's many people who would be very happy with having their homestead doubled, but in the long term it may cause more harm to where they live," he said. Lorain will lose only $290,000, Koziura said, which will not spell disaster for the International City — but that is not Koziura's sole concern. "The issues is this is being sold as property tax relief and this is good government and it's baloney," he said. "It's a snake-oil sales job that it was going to be good for the area and it's not. It does exactly the opposite … This is not a good thing for the taxpayers of Lorain County." Lorain Public Library System Executive Director Anastasia Diamond-Ortiz said she supported property tax relief even with the library about $120,000 per year. "We welcome the opportunity to participate in future discussions beforehand, or given advance notice of decisions, so we can better understand the impact on library services to the community," she said, and pledged continued services and programming to its communities. In Columbia Township, trustee Mark Cunningham said the issue was a double-edged sword. He recognized the revaluations caused an influx in tax revenue for the township, and while it could use that money to repave more roads or provide other services, he said he recognized the need to provide relief to seniors and homeowners on fixed incomes. "As a township trustee, you try to get as much money as you can and spend it wisely, but I don't want to see people suffer either because they've got to pay their taxes," he said. He said he expected the move to hurt Columbia Schools more, as its budget is more fixed and most of its costs are personnel. "I don't know where it's going to go in the future," Cunningham said. "There's (several) different bills in the Legislature dealing with property taxes and then there's a petition going on to eliminate all property taxes. … I don't know what would happen (if that passes). I don't know how any government would survive." Changes out of Columbus Beyond changes at the local level, school districts face ever-evolving legislation in Columbus surrounding their funding and property taxes. Members of the House and Senate are discussing changes to the types of levies included in schools' 20-mill floor calculations — which ensures a minimum level of tax funding for districts — and other potential changes to school funding after many districts already lost anticipated funds from the biennial budget and federal funds. Earlier this month, Republicans in the Statehouse overrode GOP Gov. Mike DeWine's vetoes from the biennial budget that place restrictions on the types of levies that can be put on the ballot. After the upcoming November election, school districts will no longer be able to place new or renew emergency or substitute levies or request an increase to a current levy. While the majority of schools have emergency levies on their rolls, only a handful in the state have substitute levies — including North Ridgeville, Columbia, Avon and Midview. A substitute levy is a levy that replaces an existing emergency levy and includes new real property in the tax base. North Ridgeville Schools can weather the $1.7 million in revenue it stands to lose under the county's exemption increase, Superintendent Roxann Ramsey-Caserio said, but it cannot absorb the loss of its $12 million per-year substitute levy — the only levy funding its operating costs. A $143 million bond approved by voters in 2023 to fund new construction within the district cannot be used to cover operating costs. She said when the district has to ask for new funds to make up the loss of its substitute levy, that new levy will actually cost taxpayers more money because it will not be subject to the homestead exemption. The substitute levy first passed in 2020 and expires in 2029. Cuts will start next school year in anticipation of the lost revenue, she said. "We probably would have to go back to the voters for a fixed-sum levy — right now the timing of that (is) unknown," she said. "But in the meantime, we are talking catastrophic cuts to programming, to services for students and ultimately, really taking a look at the very fabric of our school district because (this) is devastating to North Ridgeville Schools." Like North Ridgevlle, Columbia relies heavily on its substitute levy. First passed in 2019, it expires in 2029 and generates about $2.2 million each year — about 17 percent of the district's annual budget. "There will be cuts, there will be large classroom sizes, there will be program cuts — it will be a dark day, not only in Columbia, but in the other districts in Lorain County that anticipate those funds on a yearly basis and were passed by the taxpayers," Bansek said. School funding in Ohio was ruled unconstitutional in 1997 due to its overreliance on property taxes. A school funding formula to better balance funding between the state and local levels was partially abandoned in the most recent state budget. A cloudy horizon While state and local legislators work to reduce property tax burdens, a ballot initiative seeks to make the matter a moot point. A proposed constitutional amendment is expected to appear on the November 2026 ballot that could end all property taxes. Organizers with Citizens for Property Tax Reform have until July to secure more than 400,000 signatures across Ohio's 88 counties to see the matter go before voters. The proposed amendment has no plan within it to replace property taxes as a funding mechanism for schools, townships, county agencies or other taxing bodies. Moore questioned if people are upset with the homestead and owner-occupancy credit increase in Lorain county, what will they do when property taxes are completely eliminated. Snodgrass said every avenue to remedy property taxes are being explored — some schools looking toward income taxes, while other subdivisions are discussing sales taxes or other options. Ultimately, Snodgrass questioned what any changes will mean for the everyday household. "The price of everything is up," he said. "So you can give relief in one way, but then you're also excluding a whole other set of people — people are working every day and they do have some other means but now they're paying more and more. … At some point in time, what are the options? I think we need to think for everybody: how is this going to benefit all of us? Because we keep separating groups and creating divides and we need to collectively come up with some better solutions." Contact Carissa Woytach at (440) 329-7245 or cwoytach@chronicle.com.