The Neighborhood Design Center hosted the Columbus Housing Dialogue on Tuesday, January 21 to discuss research completed by the Greater Ohio Policy Center (GOPC) into tax stabilization strategies at the local and state level. Maria Walliser-Wejebe, Research Associate and Jason Warner, Manager of Government Affairs, discussed strategies used in other communities that can reduce the burden of property taxes on long-time or select demographic groups. Maria and Jason discussed their recent work into these topics, some of which is shared below.
Recently, conversations around the need for property tax relief programs in Ohio’s cities have become more urgent.
On behalf of members of the Ohio Affordable Housing Learning Exchange, GOPC has been tasked with reviewing property tax relief programs in other cities and peer states. To date, GOPC has reviewed two programs that could protect longtime and vulnerable homeowners in the state.
In Ohio, the administration of property tax assessment and collection is governed by state policy; any program created to alleviate cost-burden to homeowners through property tax relief would have to be enacted at the state level, with a statewide context. Currently, the state doesn’t provide any targeted property tax relief programs for either homeowners or renters.
In 2013, the City of Philadelphia made plans to change their property reassessment methods to better reflect actual market value.
Known as the Actual Value Initiative (AVI), this wholesale retooling of the tax assessment system was estimated to increase tax burden on residential property owners, many of whom had not had their values reassessed for several years. As a result, the city created the Longtime Owner Occupants Program (LOOP) to protect vulnerable longtime property owners from the significant increases expected from the AVI.
Property Tax Circuit Breakers
“Circuit breaker” programs are a widespread and longstanding model to deliver targeted relief for residents with high property tax burden. The defining element of a circuit breaker is its provision of relief based on income; taxpayers earning below a certain income level are given some amount of tax relief when their property taxes exceed a certain percentage of their income. Circuit breakers are meant to better keep property taxes in line with household income. Circuit breakers are typically state-funded, with the delivery of relief varying by program design. In states that administer the relief directly through rebate checks or income tax credits, local governments receive full payment of property taxes due, and eligible residents receive relief from the state, independent of local tax administration. In states that administer relief through a property tax credit, the state will “backfill” the revenues lost to local governments as a result of reduced property taxes.
GOPC is actively working with affordable housing advocates around the state and with state policy makers to develop recommendations that
a) provides property tax relief to vulnerable residents, and
b) anticipates “unintended consequences,” like revenue impacts for local governments.
Since policy on property tax relief will have to be acted on at the state level, stakeholders will need to demonstrate that there is a statewide need and benefit for such a program. GOPC continues to research and coordinate with advocates on protecting Ohio’s longtime residents and developing tools to address housing cost burden.
For more information, contact: Maria Walliser-Wejebe, GOPC Research Associate.