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    Property Tax Binder

    HB 140 brings changes to property tax levies and voted bond issues

    Beginning with the May 2, 2023 election, House Bill (HB) 140, also known as the “Ballot Uniformity and Transparency Act,” will make sweeping changes to election procedures, affecting all new and renewal municipal levies, including those issued for the purpose of financing utility systems, street improvements and municipal buildings.

    HB 140’s most significant provisions modify the ballot language for various types of municipal levies and voted bond issues. To illustrate how these changes will appear on the ballot, the following table shows the current ballot language for a renewal levy under Ohio Revised Code § 5705.25 compared to the revised ballot language required under HB 140.

    Current ballot language

    HB 140 revised ballot language

    An additional tax for the benefit of (name of subdivision or public library) __________ for the purpose of (the purpose stated in the resolution) __________ at a rate not exceeding __________ mills for each one dollar of valuation, which amounts to (rate expressed in dollars and cents) __________ for each one hundred dollars in valuation, for __________ (number of years levy is to run, or that it will be levied for a continuous period of time).

    An additional tax for the benefit of (name of subdivision or public library) __________ for the purpose of (the purpose stated in the resolution) __________  that the county auditor estimates will collect $_____ annually, at a rate not exceeding __________ mills for each one dollar $1 of valuation taxable value, which amounts to (rate expressed in dollars and cents)  $__________ for each one hundred dollars in valuation$100,000 of the county auditor's appraised value, for __________ (number of years levy is to run, or that it will be levied for a continuous period of time).

     

    The sample ballot language shows three significant changes made by HB 140. The first is HB 140’s requirement that a municipality’s total estimated annual revenue from the levy be added to the ballot (excluding bond issues). Second, ballot language must now express the cost to the taxpayer per $100,000 instead of per $100. Third, the cost per $100,000 must be based on true value, referred to as the “county auditor’s appraised value,” instead of on assessed/taxable value, which is 35 percent of the appraised value (for real property only). Despite this change, the ballot millage for the levy will still need to be expressed in mills (one-tenth of a cent) for each $1 of taxable value, which means that the revised ballot language will express levy amounts based on two different valuations (assessed/taxable value for the millage calculation and true/appraised value for the cost-per-$100,000 calculation).

    For any proposed levy that is a renewal, decrease, increase or expansion of an existing tax, HB 140 includes an additional requirement to calculate the cost per $100,000 based on the estimated effective tax rate for residential/agricultural (Class 1) properties (even though not all properties are residential/agricultural (Class 1) properties).

    Voters will need to be educated, not only about a proposed ballot initiative and its importance to their municipality, but also the difference between how property taxes are levied versus how they are paid. If an individual voter wishes to better understand the impact of a proposed levy on their specific property and circumstances, then the county auditor can calculate an estimate based on all relevant factors. However, it is important to note that certain differences among taxpayers, levies and properties mean the calculation of the actual taxes on an individual property derived from a levy can vary significantly. Those differences include:

    • the type of property;
    • the use of the property;
    • reduction factors that apply to fixed-rate levies, meaning property owners often pay lower effective rates for such levies rather than the full voted rate;
    • the primarily wealth-based homestead exemption and other discounts applicable to individual property taxpayers;
    • and state subsidies (i.e. the 10 percent residential/agricultural and 2.50 percent owner-occupied rollbacks) that may apply to some levies and properties but not to others.

    In addition, HB 140 will impact the form of election proceedings as they are submitted by municipalities to county auditors and board of elections prior to the election date. Election proceedings used by municipalities will require substantial revisions to comply with HB 140’s many new requirements. Municipalities with a charter will also need to ensure that any provisions which impose special procedural requirements do not conflict with these new changes. 

    Municipalities will need to be prepared to address these issues on two fronts – both internally, with efforts to bring their election proceedings in line with HB 140’s new requirements, and externally, by educating voters in a non-promotional way about the need for revenue and how the new ballot language may not be a good estimate of their actual tax liability. 


    This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.

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