Property tax circuit breaker bill has first hearing

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A bill that would create a property tax circuit breaker in Ohio has had its first hearing before the Senate Ways and Means Committee.
Senate Bill 271 is modeled after current law in Michigan; though other states also have similar legislation in place, Senator Louis Blessing, III, a co-sponsor of the bill, told the committee.
The bill would establish a $1,000 tax credit if a property tax bill amounts to more than 5 percent of a person’s income.
“Conceptually, the bill is simple: once your property taxes hit a certain threshold of your income – in the bill, this is 5 percent – increases to the property owner or renter stop, and the difference is paid for by state-funded property tax credits, or refundable income tax credits in the case of renters, of up to $1,000 per household per year,” Blessing said.
The bill limits the credit or rebate to individuals whose household income does not exceed $60,000, with that limit subject to inflation adjustments in later years.
It further limits the credit or rebate to homes whose values do not exceed a median value (in 2022 the threshold was $438,300) and rental units with a monthly rent under a specified monthly rent ($1,370 for 2022).
The state tax commissioner will publish updated limits each year based on the most recent census data.
Senators Blessing and Hearcel Craig, a co-sponsor, said the impetus for the bill stems from a recent report and recommendations compiled by the Senate Select Committee on Housing. Members of the committee held public hearings throughout the state to receive input from the public about housing issues in Ohio.
“This bill does not suffer from many of the problems associated with other property tax relief measures,” Sen. Blessing said. “It doesn’t shift local property taxes around, cap them, or generally do things that would raise questions of constitutionality. Since it’s all state funded, local governments are kept whole. The bill also ensures that it’s not just seniors who benefit but low and middle-income families, as well as younger generations. Moreover, real estate investors would see some benefit as this applies to renters. Given the rent eligibility threshold, we suspect a number of landlords may actually lower rent in order to capture tenants who would be eligible for the subsidy.”
Fixing the housing problem in the state is the long term solution, he said, and the bill is a short term solution to offer relief.
Policy Matters Ohio, a non-profit organization, has estimated about one in six Ohio taxpayers would benefit from a similar circuit breaker.