Business Meeting
Motion made by Ryan to skip the business meeting to ensure time for the speakers: 1st Jamie, 2nd Tom
Featured Speakers
Steve Welton and Charity Rauschenberg from the Hancock County Auditor’s office
State of Ohio Representative Jim Hoops (81st district)
Members in attendance introduced themselves. Steve Welton introduced Jim Hoops.
Jim Hoops:
Housing is such a big issue in Ohio. The lack of housing and the pandemic created this issue as the perfect storm.
I grew up in Deshler, then lived in Louisiana and Canada. I was the County Auditor in Henry County.
The property tax issue has become a “kitchen table” issue – everybody’s talking about it. Property taxes, sales tax, and income tax are the 3 main ways of generating revenue for the local services that we like to have. Property tax all stays local; none of it goes to Columbus, and Columbus even puts some money back in.
If this were to get on the ballot and pass, there would be no more property taxes as of 1/1/27. That’s about $24.6 billion. That all stays local in the community – EMS, fire, veterans, libraries, etc. – anything that has a property tax levy.
When you ask the group behind this what will replace this money, they say that the state will increase sales tax or income tax. But the state continues to decrease the income tax to keep Ohio competitive, and the legislature may not be willing to increase it. The sales tax would need to increase from 5-6% up to 18-20%. You have to pay sales tax where you reside, not where you make a purchase.
What type of government services do you want in Ohio? This would make a big impact, especially if it passes. It takes 430k signatures by July to get it on the ballot this November.
We need to have a frank discussion about what this would do to Ohio. The legislature has tried to deal with this tax issue. There are 5 bills that they passed, but they don’t become effective until March 17, 2026; there’s a 90-day waiting period after the governor signs them. I was involved with all of them, but the county treasurers and auditors were also involved. They have to do what the Constitution and the laws say, not just whatever they want. They’re just administering the laws.
Property taxes are based on value times millage = tax dollars collected. I was a former county auditor, so I understood inside millage and levies and how all that worked. Voting on a levy means you’re voting on dollars.
The auditor does a revaluation every three years. They’re required to go out and look at the property and see if there’s any new construction. In the triennial, they look at the sales and determine how much more the homes are selling for. They consider the different areas and varying property values. If the values increase by 20%, the millage will decrease so that the final amount is what was requested in the levy. New construction and inside millage are different.
In the 1980s, they put in the 20 mil floor. Now, as values go up, the millage goes down so that the amount is still received. Home values have skyrocketed in the last 5 years (30-40%) due to lack of housing, the pandemic, new construction being expensive because of material costs, and outside investors buying up homes. But the millage had to stay at 20 mil because of that floor, so taxes ended up increasing rather than staying about the same. The inside millage was already increasing; if the values go up, that increases also.
The big bill was HB 186. It changed where there would still be some increase, but it would be based on the cost of living not on the value of homes. We haven’t seen the effects of this yet because it doesn’t hit until the 2nd half. Findlay City Schools aren’t at the 20 mil floor yet, so this only applies to schools that were at the floor.
The Department of Taxation first has to determine the cost of living. Then they look at the increase of values based on home sales and land sales. The goal was to keep the spikes from increasing moving forward.
Another bill dealt with the inside millage. That isn’t voted on; it’s based on each tax industry within a county. Tax industries would be like each different school district. Each industry can have at least 10 unvoted on mills. With the new bill, if values increased, the revenue increase will only be based on the cost of living.
Another bill would give more local control. The budget commission (county auditor, county treasurer, and prosecuting attorney) is the gatekeeper for looking at mills, particularly that schools pass. They tell the schools to lower the millage when needed. Some counties were doing this well, but some weren’t. They made it law to clarify what the budget commission can do. If the budget commission thinks a tax industry has too much money, that industry needs to explain why.
When they did the reappraisals, the state would look at every sale through the conveyance forms – here’s the value and here’s what it sold for. That has to be approved by the state. The Department of Taxation had the final say, but the auditors felt they should have more of a say on what sales should be used to determine what the values should be.
Another bill changed what levies can be used to count in that 20-mil floor. Some schools had emergency levies for decades, so that needed to be cleaned up.
The main purpose is that we do not want to tax people out of their homes or their land. We need to find a balance of having enough money to provide adequate services. We’ll continue to work on finding this balance.
HB 186 deals with tax rollbacks for owner-occupied homes (12% to 15%), and for all other residential properties, it will be eliminated over the course of 5 years.
Q: For investors, if that 2% rollback is eliminated, that’s an increase in taxes. But a rental tenant doesn’t directly pay property taxes. Could the legislature say that tenants pay property taxes?
We can look at different ways of doing that. Tenants don’t pay property taxes, but the rent will increase if property taxes increase. But you’re at the point where people won’t be able to afford the rent. Especially if this issue gets on the ballot and passes, we’ll look at anything and everything. We have to find the money somewhere, whether through additional income or by eliminating services.
Q: You’ve been doing all this work in Columbus. When did that start? Is this just because of the movement that’s out there to eliminate property taxes? This has been an issue for a long time.
Looking back, I wish we had looked at this sooner, back in the 1980s when they put in the 20-mil floor. I wasn’t part of those discussions back then. People were taken aback by home sale prices during the pandemic. There were a lot of factors. It should have been looked at sooner, but the constitutional issue pushed it faster.
Q: The citizenry is now very alert to governmental fraud and mismanagement of tax dollars. You can’t fault them for saying we’ve had enough.
I’m not faulting the citizens. We need to look at all of this. Every two years, we do a budget, and we have a program where you can go look at what’s being spent, what revenues are coming in, etc. I always say the budget is “educate, medicate, and incarcerate” – education, Medicaid (30-40% of the state budget, for nursing homes, families, etc.), and prisons and jails. Sometimes legislation moves slowly; there are 99 people in the House and 33 in the Senate who all have different ideas on how we should spend the dollars. Are we there yet? No. There will be something that comes up that we’re not even aware of yet. When Governor DeWine was elected, we had no idea there would be a pandemic and what its effects would be, including this property tax issue.
We’ve been working on this for the last 3-4 years. There was a property tax committee looking at this, and they looked at 86 different ideas. The study was done in the last general assembly, not the current one. That brought together a lot of different people who would be impacted by this issue.
Charity: Not all of Jim’s colleagues understand taxes and such, so it can be hard to talk to the other representatives and senators about this issue. Property taxes in Ohio are complex. The auditors’ association gave hours of testimony, and most of the legislators didn’t realize how the common people were affected by property taxes and what they were angry about.
Steve: Most of the legislators couldn’t explain how the present tax situation is set up, much less what changes are needed and what they would do. It’s a very complex process. The city gets money from the county, which goes to the city’s fire and police. Real estate taxes go to lots of places that you wouldn’t even think of, and most people don’t understand that. They don’t realize what we have the potential to lose. I envision that if the property tax gets repealed, we lose important services like EMS. The townships also have levies for schools, ambulance services, etc. There were 8 levies that passed recently because people want those services. A lot of things play into this, and I don’t know that anyone has a complete list, plus it will vary by county.
Q: Can we address when big corporations come in and get big tax abatements? That burden then falls to the homeowner.
You’re absolutely right. Residential and corporations used to split basically 50-50, but now, it’s starting to shift where residential pays more. There’s a bill right now that would eliminate property taxes for military, including people who lost a military spouse. There’s also an idea that for people over 65, their taxes would stay the same. But that shrinks the pot so that young families who are left paying extra taxes.
We opened up a can of worms when we started allowing abatements, and it’s hard to close. Now, you’re competing with other states, so that’s a fine line to deal with. It’s a very valid point. People say that bringing in companies bring in jobs for people who will make a good living, and they’ll generate local revenue.
Feel free to call me (Jim Hoops) and share your thoughts about this issue because it is important.
Charity:
It’s been a busy time with property taxes, but I wanted to share about some things that came into the office this week. We’ve been asked about a letter sent by the FCS Board of Education. We asked the schools to notify property owners if they are going to file a claim. Some notices have been going out, and people are blaming the auditor’s office. Van Buren and Findlay have done this. Some of the sales are portfolios, LLCs, etc., and the value that the auditor comes up with is less than the sale price. Then the school can file on the property owner for the difference between sale price and value. It’s a quasi-judicial court, and they hear both sides. If you get one of these, go to their meeting and see what they’re doing. Ask questions about what they’re doing. A lot of times, people don’t show up; the auditor needs to be able to see both sides of the issue and gather evidence. Pay attention, inquire, and show up to the school board if you get one of these.
Q: If you receive one of those letters, who decides whether your taxes go up?
The board of revision will look at the value. The school board has a firm that will look at sales and compare values. If there’s a large spread, they will flag it and initiate the process.
Q: Who is responsible for this on the school board? Is it attorneys who make money off of this?
It works both ways. Some firms will solicit to the school board, and some school boards contract with these attorneys. Ultimately, the school board has to adopt the resolution in order to start the process and file. Sometimes they try to skip the Board of Revision and go right to tax appeals.
I’ve had to explain to people that our numbers are currently set for 2022, and now we have to catch the value up to 2025. It’s not just a one-year jump. Now, in a triennial, we have to canvas the entire county and evaluate the condition of every parcel. If you have properties in other counties, the taxation has changed for some other counties. Hancock County stayed the same. The state is moving so that the counties are more staggered in when they do the triennial rather than having all 88 counties all in the same year. That has a lot to do with what schools are doing.
The bills that Rep. Hoops discussed just passed in December, so we’re still working on implementing those and realizing the impact of those. They go into effect in March and we go to the treasurer in May, so we’re hoping everything lines up for the 2nd half collection.
I was asked about paying property taxes. Findlay City Schools are at 20.2 mills. Some of these credits that everyone is talking about for the 2nd half will not be applied for FCS. There won’t be a lot of adjustments. But for the other 8 county school districts, they are at the 20-mil floor, so there will be credits in the 2nd half. We are waiting on those numbers from the Department of Taxation.
Some people have said there will be refunds, but that is not the case. That is difficult with transfers, changes in ownership, deaths, trusts, etc. These situations make it much more complicated, and there are many hurdles to issuing refunds. We use the word credit because we can do that more easily. Refunds are very cumbersome.
We want to show you the tax bill and what information is provided on it. A lot of questions have come up as far as homestead. There is an amount that says homestead; that will help with what value is applicable. The tax bill also shows the owner occupancy credit and the non-business credit; those will be changing in statute 26.
Where your taxes go is really important. We show as much as we can on the tax bill, but there is more on the auditor’s website. Some counties pass a lot of levies. We have 17 different levies, including for the Agency on Aging, ADAMHS, JFS & Children’s Services, etc. All of those are on the auditor’s website. We are sharing that information for transparency and to answer the question of where your tax dollars go. All of the villages, cities, school districts, etc. have different levies.
These tax programs are different in other states, and Ohio’s is very intricate, with a lot of different levels. You have to dig deep into what’s going on and ask questions to figure out how it all works. Ask your state representatives all your questions.
Steve:
The state orders us what to do, and we need to implement that, and then we have to do a lot of reporting to make sure everything is balanced. There is a lot of validation that happens to make sure all the dollars go where they’re supposed to.
If you hear of anyone who is struggling with their taxes, have them contact me to see if we can work with them. They can call me or write me a letter. We know that some of these increases can be difficult for those on fixed income.
Charity:
Things have changed in the last 10 or so years regarding owner occupancy. People were purchasing properties in other states. For example, Florida is big on checking this, and they’ll call our office and check on occupancy, and they’ll likely deny it in Florida if the person resides in Ohio. If you look at your bill and no longer see the owner occupancy credit, you need to come into our office and get that reinstated.
There are programs that can take money off the value for tax benefits depending on certain criteria – homesteading, age, disability, etc. They need to talk to us in the auditor’s office. There has been talk about changing some of those programs.
Steve: There is a legal setup to help people with their taxes if it’s a big financial burden, especially for elderly people. We can often make their tax bills easier to manage. There are flexible ways we can work with people, but we need to know what’s going on to start that process. There can be other options besides foreclosures for difficult situations. We will help as much as we can and try to work with people. We’ve been successful in saving families from foreclosure due to taxes. But they have to be willing to work with us as well.
Q: There are some rumors that in Allen Township, there is a design to build a 1000-unit low-income housing complex. Do any of you know about this?
Steve: I’ve heard that it’s 300-400 units. But we don’t hear much about things like that.
None of the speakers have heard of this.
Q: If this is legitimate, why is on the down low? I’m told it has to do with the Heartland Project, and it’s supposed to be voted on by the Council pretty soon.
Steve: They may be in a position where they can’t talk about it, because the purchaser doesn’t want the information to be made public. It may not be a shady situation, but I don’t know. Check with Regional Planning to see if they know anything about it. We went through that when Sheetz came in.
Q: You spoke before about being assessed and figuring out valuation. What are the other criteria that influence how you value a property? For example, the zoning, or whether they are owner-occupied or a rental. Does being income-producing affect the value?
Charity:
We’ve identified and simplified zoning a few years ago. Unzoned properties are the hardest to assess. We are trying to group properties and stratify them with the information we have. We look at similar homes and don’t focus much on the zoning. We think more like realtors, looking at the home itself, not the zoning.
If you have two identical houses and one is owner-occupied and one is income-producing, you can look at them for the highest and best use. Income properties can be appraised differently. When we do a reevaluation, we send out notifications and ask for information. You’d be surprised what neighbors tell us, as well as other information on the Internet. But we use appraisal standards; we’re really looking at structures. If we can’t determine if it’s income-producing, we may take a deeper look at it. But we mostly look at the condition and structure from the outside.
Q: What if you’ve got an owner and all of the income from the property is going to paying bills, and the owner is not actually making any profit from it – and is now going into the red because of property taxes?
The newest thing on the scene is Airbnb, and we’re starting to face the situation of regular homeowner/rental in the same property. Different counties require reporting of this differently.
Q: Do you take into account how much profit someone is making from an income property when assessing values?
Steve: That information is difficult to come by. What you’re talking about is more income tax, not necessarily property taxes.
Charity: The team that we hire has a lot of statistics and experience in building our cost tables. They use a lot of information from a lot of sources for this. We’ve had a lot of discussions regarding the formula for income-producing properties and cap rates. Anyone can file an appeal on taxes through March 31, but we need to look for evidence behind it, not just someone saying the value is wrong. The Board of Revision has to be given documentation for what a correct value should be. It can be hard to keep up with decreases or increases in value.
Q: Is there a specific formula you use to determine this – based on the income, what you would value the property at?
Charity: It’s more than just income; there are many more attributes, cap rates, vacancy, etc. That is all set through the appraisal standards that our consultant would assist us with. As we’re working through everything, we have a team that are the experts in those types of things. But the income approach is an interesting one, because it depends on the type of business you’re running – a hotel is different than long-term rentals. It’s been a hot topic that we don’t have affordable housing.
Steve: Location and neighborhoods became a big issue with housing being affordable, and even for the construction and renovation of homes. Things are coming, it’s just a matter of time.
Q: I live in Allen Township and am on the school board for Van Buren. Looking at the fact that we’re unzoned and if a large low-income complex were to come in, what would that to do the property taxes? They wouldn’t be property taxpayers. We don’t know if this is Section 8 or not; no one in authority has confirmed anything.
Steve: Those groups have such low rates of taxes, and it’s a long stretch to get the laws changed.
Q: Who sits on the Board of Revisions?
Charity: It’s a county board, made up of the auditor, the treasurer, and the commissioner. On the budget commission, it’s the auditor, the treasurer, and the prosecutor.