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State lawmakers are considering legislation that would collect statewide information about property tax exemptions, and add that data to the list of tax breaks reviewed by state officials every other year. The information itself already exists — county auditors deliver it to the Ohio Department of Taxation regularly. But backers believe the move could shine light on incentives like property tax abatements, which have for years been a point of contention between city and county governments.
Cities like offering these tax breaks because they juice development. Counties aren’t as wild about them because they get stuck with the bill. Under Ohio’s tax structure, cities rely on income taxes for funding, and counties turn to property tax dollars.
So, city leaders get to take credit for booming neighborhoods like the Short North in Columbus, while the county has to fret about funding services like schools when that neighborhood’s property taxes have been drastically reduced.
Greene County Auditor David Graham spoke in favor of the measure, H.B. 66, on behalf of the County Auditor’s Association during the Senate Way and Means committee hearing Tuesday. Although local governments administer the exemptions, by for instance, setting the boundaries for Community Reinvestment Areas, state lawmakers can define how those programs work.
“The total exemptions, not just the CRAs and things like that, grew by 26% while taxable property values only increased 15%,” Graham told lawmakers. “So, we believe this would be important information to get before the legislators so that you can measure the effectiveness of the abatement programs.”
Although the push seems geared toward eventually altering abatement policy, Graham says his organization isn’t pushing to eliminate any program. Their concern, Graham explained, is one of scale. He brought up a recent example in Xenia, where a handful of derelict properties were improved thanks to an abatement.
“They were offered a tax abatement to build that specific house, or to rehab a specific house. To build a new subdivision is a completely different issue,” he argued. “The auditor’s association would support revitalizing an area that needs it, versus building a brand new area that you know is going to increase demand for service.”
The committee didn’t vote during Tuesday’s hearing, and Graham was the only speaker weighing in on the idea. But Sen. Sandra Williams, D-Cleveland, did raise questions about the role state lawmakers play in the process.
Williams says she’s still undecided on the bill but isn’t opposed to having information more readily available. She just doesn’t see how sending that information to a state review board leads to more equitable outcomes.
“The Community Reinvestment Act and other tax exemptions are working to develop areas, but what I’m saying is that the wealth needs to be spread out to more areas who qualify,” Williams said. “I think that the local level, has the responsibility to make sure they’re just not investing in one particular area, over and over and over again.”
H.B. 66 has already passed the House and has the backing of organizations representing county commissioners, school administrators, and school board members.
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