Ohio Counties Divide Over Property Tax Breaks

CLEVELAND, Ohio – In Northeast Ohio, counties are approaching new property tax breaks in very different ways. Some have embraced these breaks for seniors and homeowners, while others have turned them down, citing concerns about the impact on schools, townships, and other local entities.

The discussion centers around a state law passed in June as part of the budget, allowing counties to enhance homestead and owner-occupancy credits. These credits benefit seniors, individuals with disabilities, and homeowners residing in their properties.

This revamped approach diverges from the established system where the state compensates schools and local services for lost revenue. The new “piggyback” strategy doesn’t involve funding backfilling, meaning these institutions are likely to see reduced financial support.

This tool is part of a broader effort to reform property taxes in the state. Recent changes were made this week, including an expansion of individual owner occupancy credits. Lawmakers believe this will not influence ongoing county decisions.

The introduction of this option has split Ohio counties on one of the rare property tax choices they can make. Should they prioritize relief for taxpayers struggling financially, or align with schools and organizations claiming they require the revenue?

Data from the Ohio County Commissioners Association reveals that only 10 out of 88 counties have implemented an expanded homestead exemption. This exemption allows seniors to deduct property taxes equivalent to $28,000 of a home’s value, and $56,000 for disabled veterans.

Additionally, the association reported just four counties have approved the increase to a 2.5% owner occupancy credit. This credit benefits those using their primary residence, providing a 5% discount on their tax bill in participating counties.

Contrasting Choices in Lake County and Geauga County

Lake and Geauga counties showcase the stark variations in decision-making. Lake County voted on October 30 to adopt both exemptions, aiming to support homeowners facing steep tax bills because of rising property assessments. Conversely, Geauga County unanimously opted against pursuing the same options.

Counties had a deadline of the end of October to decide on expanding these tax cuts under the upcoming 2025 legislation, with an official decision needed by next July.

The Lake County Auditor estimates that implementing these deductions could result in a loss of about $14 million annually in local tax revenue, including over $9.3 million for school districts.

Lake County commissioners justified their decision by highlighting the exorbitant property tax bills residents are facing.

“They say the rent is too high. Well, the property taxes are too high,” noted Commissioner John Plechnik.

Local school officials expressed concerns that such changes would deeply affect budgeting efforts, especially for districts that are already pinching pennies. Bill Wade, finance director for Mentor Schools, pointed out the average homeowner might see a nominal yearly savings of $65.34 due to the credit expansion, while schools could lose millions.

“It’s less than $6 a month,” Wade said regarding the homeowner’s perspective. “Yet, it will cost $2 million.” He added that rapid changes complicate long-term financial planning.

“We’re trying to cut expenses and keep our revenue intact,” Wade explained. “If you cut our funds drastically, we could lose a significant amount in a very short time.”

In Geauga County, officials viewed the risks of implementing tax cuts as significant. They predict that adopting both credits could lead to a revenue shortfall of about $7 million for local schools and institutions.

The Geauga County Health District projected an annual loss of around $17,000, creating pressure on an already tight budget. Officials warned further cuts might reduce efforts in crucial areas like testing and water safety monitoring.

Don Rice, superintendent for developmental disabilities, mentioned their department could face a loss of about $317,000 yearly, significantly affecting early intervention programs.

Geauga County leaders argued they would need to pursue new tax collections soon to offset the expected loss.

“I think all residents deserve some form of tax relief,” remarked Auditor Chuck Walder. “But we need to be cautious. Offering these tax breaks could lead to increased taxes elsewhere. It’s a complex situation.”

Overall, many counties statewide have opted against adopting the “piggyback” credits for the time being.

Cuyahoga County Stands Firm

Cuyahoga County also chose not to implement any of the 2025 tax credits, estimating a total revenue loss of about $60 million.

Chris Ronayne, a spokesperson for the County Executive Office, explained that the “piggyback” property tax exemptions do not receive state reimbursement and detract funds from schools and local governments.

Instead, the county is enhancing its taxpayer support program for seniors who are struggling with payments, offering up to $10,000 in one-time assistance. Ronayne is also pushing for changes at the state level to increase homeownership tax credits, alongside the introduction of “property tax circuit breakers,” to limit bills beyond certain thresholds.

While these measures would ease taxpayer burdens, they require state involvement to compensate local governments to prevent revenue loss.

Progress in Medina and Lorain Counties

Medina County is among the ten counties that enacted a doubled homestead credit. In Lorain County, commissioners also approved doubling both credits without altering the current budget, largely in response to a spike in reassessments.

This approach will cost local agencies close to $17.4 million per year.

In defending their actions, Lorain County commissioners pointed to the continued financial advantages of rising property values for the Lorain County School District.

While the credit expansion might decrease potential revenue by around $11 million, they noted the district would still see a net benefit of $36 million in the coming year compared to the previous one.

Commissioners observed a similar trend for other local agencies, with the county’s general fund remaining intact at $3.5 million. While property tax revenue rose from $21 million to $25 million, the “piggyback” credit would only reduce that increase by $786,000.

“Homeowners in the county … are struggling to keep up,” Commissioner Dave Moore remarked. “This is what the law allows us to do and we are following through.”