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Ohio Senate committee hears officials warn midyear property-tax credit in House Bill 186 could cause confusion and shift school costs
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Summary
County treasurers, school associations and the Fair School Funding group told the Senate Local Government Committee that the bill’s midyear credit and removal of a formula adjustment could create administrative burdens, disrupt escrow/prepayment systems, and shift costs from the state to local taxpayers without corrective formula changes.
COLUMBUS — County treasurers, career-technical educators and school finance advocates urged the Senate Local Government Committee on Thursday to address administrative, timing and funding risks in Substitute House Bill 186, the proposed property-tax reform that would apply a midyear credit and cap school revenue growth.
Catherine Kellich, incoming president of the County Treasurers Association of Ohio and Belmont County Treasurer, told the committee the bill’s proposed midyear credit would force counties to issue refunds or credits, create negative or conflicting balances on online systems and “greatly complicate” escrows and prepayment programs used by thousands of homeowners and mortgage servicers. “A midyear credit would severely disrupt these programs,” she said, urging that changes begin at the start of a tax year to avoid confusion and additional vendor costs.
Why it matters: The treasurers warned that the operational fallout could include increased vendor charges, reprinting bills, staff time to reissue statements and confusion for taxpayers who prepay or use escrow accounts — costs that counties would bear unless the law is adjusted or funded differently.
Career-technical leaders said the legislation’s revisions would also reduce expected revenues for joint vocational and career centers. Scott Wodicka, superintendent at the Ashtabula County Technical and Career Center, said the bill as drafted would leave career-tech centers $33 million short across two years (about $16 million in tax year 2026 and $17 million in 2027) and cited an example of a $558,000 projected loss to his center. “We respectfully urge some creation of a supplemental funding mechanism to help cushion or eliminate that $33,000,000 loss,” Wodicka said.
School finance groups confirmed the bill includes a state reimbursement provision of $465,000,000 intended to hold school districts harmless to 2024 revenue levels for two years. But representatives from the Buckeye Association of School Administrators, the Ohio Association of School Business Officials and the Ohio School Boards Association warned that the House removed a proposed adjustment to the state funding formula that would have aligned formula calculations with the bill’s caps. Without that recalibration the associations said the formula would treat capped local valuations as higher than allowed and could produce “phantom revenue,” which would lower future state aid.
“Without this change, districts will appear to have greater local capacity than they actually do, creating what is often referred to as phantom revenue,” a written representative statement said. The associations cited Legislative Service Commission estimates of a $50.2 million revenue shortfall in tax year 2026 and $56.9 million in 2027 tied to the change in baseline calculations.
Experts also flagged legal risk. A legal analyst told the committee that HB186’s county-by-county credit approach could clash with constitutional uniformity requirements for districts that cross county lines and cited the 1980 Swetland decision as precedent that may limit how credits can be applied across multi-county school districts.
Committee members asked multiple times whether counties and their software vendors could implement the change in time for the next tax year; Kellich and other witnesses said the limiting factor is vendor readiness and that May 1 would be the latest practical date for auditors to receive Department of Taxation inputs so treasurers could apply a midyear credit for counties that collect second-half taxes in June.
The presenters repeatedly stopped short of opposing the idea of taxpayer relief. Kellich said, “We 100% are behind tax reform. People need the relief,” but she emphasized the timeline and implementation details must be workable for all 88 counties. Similarly, school and career-tech witnesses supported meaningful property-tax relief while urging either restoration of the formula adjustment removed in the House or a targeted supplemental mechanism to prevent local revenue shortfalls.
Next steps: The committee recorded this session as the third hearing on Substitute House Bill 186 and received additional written testimony; it did not vote on the measure during the session.
