Some states use circuit breakers to help homeowners hit hard by property taxes. Would Ohio Republicans pay for it?
Soaring property values now turning into big tax bills
With home values surging since the pandemic, homeowners nationwide are now receiving new, bigger property tax bills as a result.
Scripps News
- Ohio lawmakers are debating solutions for property tax relief, including a “circuit breaker” program used in other states.
- A circuit breaker program would provide tax relief to residents whose property taxes exceed a certain percentage of their income.
- While some lawmakers support the circuit breaker, others argue it would be too costly and prefer alternative solutions like addressing local government structure.
Richard Pope bought his house 20 years ago, a milestone for someone who overcame homelessness and addiction.
The 64-year-old uncle has lived in Cincinnati’s Westwood neighborhood ever since. He plans to pass the home onto his sister’s children, but it’s becoming hard to maintain. Pope needs to put up new drywall, remodel a bathroom and repair damage caused by a previous tenant.
Complicating those efforts: Pope’s property taxes nearly doubled after a reappraisal in 2023 and increased his mortgage payment by $200. He appealed the valuation but said the process is moving slowly, forcing him to adjust to a new financial reality in the meantime.
“I’m having to budget differently as far as maintenance on my vehicle,” Pope said. “I’m having to budget differently when I go grocery shopping. I can’t tell you the last time I bought clothes for myself.”
Pope isn’t alone. Homeowners across Ohio are sounding the alarm about high property taxes, and some want to ban them altogether. That’s left the Legislature scrambling for a way to provide relief and debating whether to take the whole system apart.
Some lawmakers and policy wonks have touted an idea used by other states − known as a circuit breaker − that aims to help homeowners hit hardest by property taxes. There’s just one problem: Ohio Republican lawmakers may not want to pay for it.
“The notion that we don’t have the money for it is a dodge,” said Zach Schiller, research director for Policy Matters Ohio, a left-leaning think tank. “It’s a dodge from people who don’t want this to happen.”
What is a property tax circuit breaker?
Circuit breakers vary in their design, but the basic idea is this: States provide relief to residents who spend an outsized share of their income on property taxes or rent. Some programs are geared only toward seniors and people with disabilities, while others use income thresholds to determine who qualifies for help.
Assistance tends to come in the form of a standalone rebate or income tax credit, according to the Institute on Taxation and Economic Policy.
“Families are overloaded with their property taxes,” said Brakeyshia Samms, a senior analyst for the institute. “The circuit breaker kicks in like an electrical circuit breaker and helps alleviate the pressure that these taxes put on family budgets.”
Like any policy, circuit breakers cost money. Michigan provides assistance to homeowners and renters of all ages whose household income is below a certain amount. Nearly 1.1 million people claimed the credit in 2023, costing the state $849.4 million, a spokesperson for the Michigan Department of Treasury said.
Minnesota spent $1.6 billion on its Homestead Credit Refund in the 2024-2025 budget cycle, according to the state Management and Budget office. Other states, including conservative ones like Missouri and Indiana, have less expansive circuit breakers that only apply to seniors or exclude renters.
A bipartisan proposal from Ohio Sens. Bill Blessing, R-Colerain Township, and Kent Smith, D-Euclid, would assist people if their property tax burden exceeds 5% of their income. The credit would be limited to $1,000 per year for Ohioans who make less than $60,000, although both numbers could be adjusted for inflation down the road.
That would cost Ohio about $900 million per fiscal year, according to analysis from the Legislative Service Commission. Blessing said lawmakers could cover it with two policy changes: Tweak a deduction for business income and raise taxes on people who extract natural resources from soil or water.
“There’s an ethos here that we don’t increase taxes any time for any reason ever,” Blessing said. “I can appreciate not wanting to raise the sales tax or the income tax … but a lot of these things are more minor taxes or carve-outs that were overly generous.”
‘There’s money out there’
Not everyone is convinced the state should shell out more money for property taxes. Ohio spent $1.9 billion on the homestead exemption and other property tax rollbacks for 2023, according to the Department of Taxation.
Instead, House Republicans passed a plan to provide property tax relief to homeowners who live in school districts that have more money in their savings. Critics say this would only hurt districts trying to be fiscally responsible, but Rep. Brian Stewart, R-Ashville, contends it addresses the root of the problem.
“We’re interested in actual property tax relief that reduces the amount residents are paying, not simply shifting the cost from one government to another,” Stewart said.
Greg Lawson, a research director for the Buckeye Institute, a conservative think tank, said he understands the appeal of circuit breakers, but he believes they distract from a larger conversation about property taxes. He said the cost would keep Ohio from exploring other tax reform and could even lead to future tax hikes.
Lawson argued lawmakers should instead examine Ohio’s local government structure and whether municipalities and counties can share more resources.
But that kind of change takes time − and homeowners want tax relief now.
“You brought gambling to Ohio, use some of that money,” Pope said. “They sold our railroad here in Cincinnati, use some of that money. There are solutions out there. There’s money out there.”
State government reporter Haley BeMiller can be reached at hbemiller@gannett.com or @haleybemiller on X.
