As President-elect Donald Trump prepares to take office, economists are focusing on how his promised policies could shape 2025.
In 2024, Missouri faced economic challenges, including declining revenue and slow population growth. The economy dominated the election, with voters nationwide prioritizing gas and food prices. Moving forward, economists highlight tariffs, the stock market, electric vehicles, agriculture and education as key issues.
Jason Miller, professor of supply chain management at Michigan State University, predicted Trump's tariffs will affect 2025, although positive signs remain.
"Retailers have entered the holidays with inventory sort of in line with demand conditions," Miller pointed out. "November sales for motor vehicles were phenomenally strong for light trucks and SUVs; it was, on a seasonably adjusted basis, the third-highest month of all time."
Miller believes importers will stockpile Chinese goods to avoid tariffs. Past tariffs failed to create jobs and instead drove up costs, raising prices for consumers.
He also projected a major supply-chain issue by Jan. 15, involving the International Longshoremen's Association, as East Coast and Gulf port contracts expire, raising the threat of port strikes. However, he sees potential for a rebound in the manufacturing sector, an industry facing challenges recently.
"Now that the Fed is cutting interest rates, that is a nice tailwind for the type of goods needed for capital investments," Miller explained. "For things like machinery, as well as goods for residential construction, so bricks and lumber and shingles."
Miller added they are also monitoring potential extreme weather events in early 2025, such as the polar vortex back in 2018, which could impact the economy.
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As President-elect Donald Trump prepares to take office, economists are weighing in on how his promised policies might shape what is ahead in 2025.
The economy topped the 2024 election, with gas and food prices a priority for many voters. Now, economists point to tariffs, the stock market, electric vehicles, agriculture and education as key issues for the new year.
Jason Miller, professor of supply chain management at Michigan State University, predicted the tariffs Trump has promised will take center stage in 2025. However, he pointed to signs of a positive tailwind.
"Retailers have entered the holidays with inventory sort of in line with demand conditions," Miller pointed out. "November sales for motor vehicles were phenomenally strong for light trucks and SUVs; it was, on a seasonably adjusted basis, the third-highest month of all time."
Miller believes importers will stockpile Chinese goods to avoid tariffs but past tariffs failed to create jobs and instead drove up costs, raising prices for consumers.
Miller projected the first major supply-chain story of 2025 could unfold as early as Jan. 15, involving the International Longshoremen's Association. He noted the East Coast and Gulf port contracts are set to expire, raising the threat of a second round of port strikes.
"We may see port strike, Round 2," Miller observed. "No one is clear yet on how the incoming Trump administration would respond to that. Would they invoke the Taft-Hartley Act to end that strike, or would they let that play out?"
He added they are monitoring the potential for extreme weather events in early 2025, such as the polar vortex back in 2018, which could have a substantial impact on the economy.
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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.
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Over 70 Michigan townships and counties are taking a stand in court, saying the state is overstepping its authority on renewable energy permits.
These municipalities have appealed to the state Court of Appeals on Michigan's new clean energy law. They argue it takes away local control over zoning and permits for renewable projects.
They say the authority goes to the Michigan Public Service Commission under the new law.
Attorney Michael Homier said the commission initially promised input from local communities, but changed the process through an order.
"My clients, you know, frankly find it insulting," said Homier. "This is about local control and the constant erosion of local control, when the state and some bureaucratic agency thinks they know better, and they don't."
The new law went into effect on November 29. A spokesperson for the MPSC said the agency will implement the legislation as the court reviews the case.
The municipalities claim the order from the MPSC also improperly redefines key terms, creates unlawful processes, and contradicts clear legislative intent - violating the Administrative Procedures Act.
Homier said this is a big issue.
"You can't just change those definitions because you want it some other way," said Homier. "That's not how it works. Only the legislature can amend it."
Michigan aims for 100% clean energy by 2040, with 2023 legislation requiring 80% from clean sources and 60% from renewables by 2035 - something Homier stressed that he's not against.
"Nobody wants to stop clean energy, at least I don't," said Homier. "None of my clients do. But, they do have a say in where it should be located and what adverse impacts might be caused by it."
Since filing the appeal on November 8, and an amended version on November 12 - adding more municipalities, Homier said about a dozen others have contacted him wanting to join the fight.
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