By Andrew Tobias for Signal Cleveland.
Broadcast version by Brett Peveto for Ohio News Connection reporting for the Signal Ohio-Public News Service Collaboration

Ohio’s property tax system is supposed to protect homeowners. It’s designed to prevent big increases in their home’s value from translating to big increases in their tax bills. 

This is done by the “reduction factor” in the state’s current tax formula, which in most cases automatically reduces tax rates when property values go up in a given community. This reduction factor, or safety valve of sorts, is the heart of House Bill 920, a 1976 reform that established Ohio’s modern system of property taxation. Lawmakers passed it in response to an historic rise in home prices. 

But today the formula is showing signs of breaking down. As a result, homeowners in a record number of school districts – mostly concentrated in rural and exurban areas – won’t get the full benefit of that safety valve on the taxes they pay to local schools.

That means homeowners in these communities – which have a lower tax base experts call the “20-mill floor” – are seeing bigger hikes in their tax bill compared to homeowners in some other parts of the state.

Last year, property values jumped by an average of 35% in counties that updated their values. For homeowners in communities where the safety valve was shut off, this would translate to a roughly 25% larger tax bill. For areas where it stayed on, the increase likely would be more like 5%. 

Several state lawmakers describe rising property taxes as the single top issue for their constituents, especially for seniors and others on fixed incomes. So they have introduced various bipartisan bills meant to lessen the financial damage on homeowners. But none of the bills has gotten final approval, and it’s unclear whether any will before the legislature breaks at the end of the year.

“We’re going through something that’s pretty unusual, and it’s having this extreme effect,” said Howard Fleeter, a Columbus-based economist who studies and advises school districts on school-funding issues.

Why the safety valve doesn’t help all communities

Ohio assesses property taxes in units called “mills,” each one of which translates to $35 in taxes per $100,000 in property value. Local governments are allowed to charge property owners up to 10 mills, or $350 per $100,000 in value, in taxes without taking any special steps. 

But voters must approve any property taxes beyond that. This is why school districts and other local governments commonly put tax levies on the ballot.

Setting up taxes this way could mean approved property taxes would rise indefinitely without another vote as home values rise. That’s why the state’s complex tax formula has a safety valve to protect homeowners. It automatically lowers tax rates for most voter-approved levies via the reduction factor when property values go up while guaranteeing the tax raises the same amount of money it did when voters first approved it.

The combination generally keeps a homeowner’s tax bill stable even if their property value goes up.

But if the tax rate drops to 20 mills, the state formula shuts off the reduction factor and locks in the rate. The technical name is “20-mill floor,” and it’s meant to make sure school districts get enough funding to operate.

In communities at or below the 20-mill floor, homeowners get no protection from the reduction factor on the portion of their tax bill that goes to schools – which is around two-thirds of most homeowners’ tax bills. So their tax bill would go up significantly if their property sees a significant increase in value.

Who is most likely to see the larger hikes on their property tax bills? 

As of January 2024, 409 of Ohio’s 611 school districts were at the 20-mill floor, according to Fleeter, the Columbus economist who studies school funding. 

That’s double the number from five years ago, and it’s likely to continue going up.

Fleeter said there’s one major reason for the increase: The ongoing process in which county auditors are updating property tax values for the first time since the coronavirus pandemic sent home prices soaring. Ohio updates its tax values at the county level, with one-third of counties doing so each year. 

Updates done in 2023 are showing up on tax bills this year. Fleeter expects similarly large property value increases for the 2024 revaluation, which will include Cuyahoga, Lake, Lorain and Stark counties and will take effect in 2025.

Fleeter said counties that updated property values in 2023 saw an average increase of nearly 35%. The reduction factor kicked in and lowered property tax rates in many communities, sending their rates to the 20-mill floor. But by hitting the floor, the safety valve shut off. 

“There’s a problem in these districts where taxpayers are seeing large tax increases that House Bill 920 was supposed to prevent,” Fleeter said.

In high-tax communities, the floor is never hit

In areas where voters have approved high property taxes, like Cuyahoga County, tax rates are high enough that they’re unlikely to ever approach the 20-mill floor. 

But it’s more likely to be an issue for communities where voters have approved fewer property taxes in general. These are usually found in rural and exurban areas.

There are some exceptions. 

For example, the Cincinnati City School District, the state’s second-largest public school system, is at the 20-mill floor, according to state tax data. This is because the district gets a significant portion of its funding from an emergency levy. State law exempts emergency levies from counting against the 20-mill floor, which means the increased property values have a larger tax effect for homeowners there.

Other school districts with large emergency levies at the 20-mill floor include Willoughby-Eastlake combined schools in Lake County, Perrysville village schools in Wood County and Mansfield City Schools in Richland County.

In the other 202 school districts with the 20-mill floor, the reduction factor should still help prevent huge tax increases. These generally are in suburban and urban areas that pay higher taxes to begin with.

The particulars will vary by property owner, since the state’s property tax formula also factors in how someone’s property value changed compared to the average change in their community.

“This is a real question in many rural districts in a way it’s not in the same way in urban districts,” said Zach Schiller, a researcher with Policy Matters Ohio, a liberal think tank. “… It does still mean we have significant numbers of people who are in fact seeing a squeeze because their property taxes are going up. And that’s a problem that needs to be addressed.


Andrew Tobias wrote this article for Signal Cleveland. This story was produced in association with Media in the Public Interest and funded in part by the George Gund Foundation.


get more stories like this via email

More Michigan residents need access to affordable housing and health insurance, according to a lawmaker pushing for change.

Rep. Carrie Rheingans, D-Ann Arbor, a public health policy expert, marks the issues as priorities. This week, she introduced House Bill 4009 to repeal Michigan's 1988 ban on rent stabilization. She said it would restore local control and allow cities to consider measures like rent control.

Rheingans shared her personal experience of the financial strain on renters in cities like Ann Arbor, where many spend over half their income on housing.

"I'm a renter in Ann Arbor. I've been a renter there for over 20 years, because I can't afford to buy a house in the area," Rheingans explained. "My rent went up 33% from my last lease year to this lease year and there's nothing prohibiting that."

The bill has been referred to the Committee on Government Operations for review. Rheingans added she is also a strong advocate for expanding the MiCare program, created under the Affordable Care Act, to become publicly funded insurance covering all Michiganders without co-pays or coverage limits.

Nearly 500,000 Michigan residents, including 80,000 children, lack health insurance. Rheingans emphasized if MiCare could be expanded, they would be eligible for comprehensive coverage, from hospital stays and prescriptions to mental health care. With a background in public health, she called it her passion.

"I believe that every policy issue is a health issue," Rheingans outlined. "The air we breathe, the water we drink, the food we eat and the access we have to medical care. All those kinds of things are items that we can work on in the world of policy."

Rheingans now represents the area of Michigan where she grew up in Jackson County. Her great-grandfather served as a minister there nearly a century ago. Her legislative tenure began two years ago this month.


get more stories like this via email

Iowa lawmakers are considering reducing fines companies pay for breaking child labor laws. The state has said it's trying to find safe and creative ways to add more people to the workforce.

The proposal to rewrite Section 32 of the state's child labor laws would reduce fines for companies that violate them from $10,000 per instance to $2,500.

Iowa AFL-CIO President Charlie Wishman said Iowa has the infamous distinction of leading the nation in rolling back labor laws designed to protect minors.

"You've seen a lot of child labor law reform all across the country and it doesn't really seem to necessarily be based in partisanship," said Wishman. "You can see a place like Alabama that's strengthening it. You can see a place like Iowa that's loosening it."

The state has said it's looking at creative ways to add more people to the workforce, with shortages especially critical in rural areas.

Wishman said he worries reducing the fines would create even greater safety risks for minors in those places. The proposal is in the Legislature's joint Administrative Rules Review Committee.

Iowa is one of the only states that reports losing population, and with that out-migration goes a much-needed employee base.

As a labor advocate, Wishman said he isn't opposed to giving kids a chance to earn money and learn responsibility by working.

"But that doesn't mean that has to come at the expense of their schoolwork, their extracurricular activities or other things like that, or other responsibilities they have," said Wishman. "And when you lower the penalties that businesses would have for violating the law, you're just going to encourage more violations."

Recent changes to Iowa law allow 14- and 15-year-olds to work up to six hours on a school day, extends working hours for kids to 9 p.m. during the school year, and until 11 p.m. during the summer.

Just nine months into her tenure, Michigan state Rep. Mai Xiong, D-Warren, is ringing in the new year with new legislation. Now on Gov. Gretchen Whitmer's desk, Xiong's bill allows public employers to increase contributions to workers' health plans.

A former Macomb County commissioner and the first Hmong American woman to serve in the Michigan House of Representatives, Xiong said she's passionate about helping people live better lives.

"With inflation and rising prices at the grocery store and the gas pump, it's just really hard," she said. "The cost of living has gone up - and so, whatever we can do as a government to help Michiganders, that's something that I want to contribute to doing."

Her bill also requires public employers to cover at least 80% of the total annual costs of the medical benefit plans they offer or contribute to, for their employees and elected public officials.

Xiong also has sponsored and supported legislation related to reproductive health data privacy, maternal care expansion and a resolution honoring Hmong soldiers who fought for the United States in the Vietnam War. Speaking on the House Floor in the Michigan Capitol last summer, she shared how her heritage and education have influenced her.

"My parents fought hard to bring me to this country because they knew how important education was," she said. "It is because of the teachers that I am here today - Miss Nolan, Miss Merriman and so many others - who shaped me into being who I am today."

Xiong started Mai&Co., a clothing business inspired by Hmong traditions, in 2017. She ran it from home while raising four young children, and said that experience helped shape her views on supporting small businesses and economic growth.


get more stories like this via email