Commissioners weigh local homestead exemption under House Bill 96 as tax impacts emerge

Butler County commissioners on Sept. 2 discussed whether to adopt a local homestead exemption authorized in House Bill 96 and asked staff to return with detailed scenarios before taking action. Staff said the county would need a resolution by Oct. 1 to apply the exemption for tax year 2025, collected in 2026.

The county’s staff described the provision and the estimated fiscal impact. “So it would be $7,700,000 for this is for tax year '24 payable in '25,” a county staff member said, adding later that the county anticipates an annual cost in that range. The staff also noted the exemption would not reduce the county’s inside millage but would reduce revenue for other local taxing entities.

Why it matters: the exemption would reduce property tax bills for eligible homeowners but shifts revenue away from school districts and other taxing authorities. Commissioners repeatedly pressed for more detail on which jurisdictions would lose revenue and how many households would be affected.

Staff said eligibility under the local option mirrors the state categories: homeowners age 65 or older with limited income, veterans, disabled persons or spouses of deceased veterans. “That's correct. And or, a veteran, disabled, a disabled person, or a, spouse of a deceased veteran,” the staff member said. Auditor and staff estimates flagged about 18,500 potentially eligible households but cautioned that actual take-up would require an application process.

The auditor’s preliminary tables, shown to commissioners, break the projected revenue losses down by taxing jurisdiction. Staff cited examples including an estimated near-$1 million reduction to Butler County in one column and larger impacts on some local school districts. Commissioners noted that several school districts — Lakota, Fairfield, Middletown and Hamilton — could be particularly affected because of their tax millage levels.

Commissioner Provancha requested clearer jurisdictional detail and the staff agreed to run three scenarios requested by the board. “About 18,500,” Provancha said when asked about the projected count of eligible households.

Commissioners did not vote on adoption. Several members signaled caution: one commissioner said the board would not act that day and wanted further numbers; another said they were open to considering inside-millage reductions as an alternative to the local exemption. “We're not gonna take any action today,” a commissioner said. The administrator told the board staff would prepare a resolution and submit it for review by the prosecutor and the auditor in time for the Oct. 1 deadline if the board gives direction.

Discussion versus decision: the meeting record shows discussion and requests for follow-up modeling but no formal adoption vote. Staff identified three options — adopt the local homestead exemption, adopt an owner-occupied credit, or do neither — and will return with scenario runs that show jurisdictional revenue effects.

Clarifying details provided at the meeting: projected affected households about 18,500 (staff estimate, not a guaranteed figure); estimated annual fiscal impact roughly $7.7 million for the valuation year discussed; the exemption must be enacted by Oct. 1 to take effect for the following collection year; eligibility categories include age 65+, veterans, disabled persons, and surviving spouses of veterans; the change would not alter the county’s inside millage but would reduce revenue to other taxing units, especially school districts.

Next steps: staff will provide three fiscal scenarios for board review and draft a resolution for prosecutor and auditor review if the board directs staff to proceed. No formal adoption occurred at the meeting.