With summer in full swing, the November general election seems far off into the future. However, the deadline is fast approaching for local governments to submit issues to the Board of Elections for the November 2014 ballot. With recent changes to the Ohio Revised Code, local ballot questions must be submitted to the Board of Elections by August 6, 2014 for the November 4, 2014 general election.
Political subdivisions such as municipalities have struggled with budgeting shortfalls in recent years. In 2011, the state government cut the Local Government Fund by $555 million, resulting in municipalities receiving significantly less funding from the state. State legislators also eliminated the estate tax, 80 percent of which went to cities and townships. When faced with sudden and drastic losses of revenue, local governments turned to property tax levies in an effort to raise sufficient funds for police and fire and other local services. Property taxes are measured in mills. 10 mills can be levied as “inside millage” meaning that up to 10 mills can be collected by a taxing district without being voted on by the people. “Outside millage” is anything beyond that first 10 mills and must be approved by a majority of voters.
When considering a property tax levy, local governments have options. If a levy already exists, but is expiring, a renewal or replacement levy can be put on the ballot. If the levy is renewed, it must be for the same amount of mills as previously levied but can contain an increase in millage if so stated. A replacement levy can seek a different millage amount. Local governments also have the option to place a new levy on the ballot.
Increasingly, local governments are seeking renewal levies as opposed to new or replacement levies. This is due to yet another change in state law. Up until recently, the state of Ohio was subsidizing property taxes by 10% on most properties and by 12.5% for owner occupied residences. But in 2013, the state government eliminated this so-called “rollback” for all new and replacement levies. For this reason, local governments are considering renewal levies in order to preserve the roll-backs for taxpayers. Often renewal levies are paired with an increase. This way local governments can receive an increase in property tax revenues while still preserving the rollback for property owners for the millage amount that is renewed.