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The State of Ohio

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Billions more in investment from Google - but is there enough electricity for that? Sarah Donaldson reports. And high property tax bills have been coming in with the high temperatures. Two lawmakers talk about possible solutions, this week in "The State of Ohio". Archive interview with Bill Blessing and Dan Troy explore the issue.

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00:00:39	Billions more in investment
00:00:39	from Google.
00:00:41	But is there
00:00:41	enough electricity for that?
00:00:44	And high property
00:00:45	tax bills have been coming in
00:00:45	with the high temperatures
00:00:47	to lawmakers.
00:00:48	Talk about possible solutions
00:00:48	this weekend.
00:00:50	The state of Ohio
00:01:10	welcome to the state of Ohio.
00:01:11	I'm Karen Kasler.
00:01:13	Google has announced
00:01:14	another $2.3 billion
00:01:14	investment in central Ohio
00:01:18	in addition to the $4.4
00:01:18	billion
00:01:20	the tech giant has invested
00:01:20	in Ohio since 2019.
00:01:24	Three of Google's 17
00:01:24	data centers nationwide are in
00:01:28	New Albany,
00:01:28	Columbus and Lancaster.
00:01:30	But the state's biggest
00:01:31	electric provider says project
00:01:31	like these are huge
00:01:34	energy draws.
00:01:35	So those tech companies need
00:01:35	to have more skin in the game.
00:01:38	State House correspondent
00:01:38	Sarah Donaldson has the story.
00:01:41	Central Ohio's becoming
00:01:42	quite the hub
00:01:42	for facilities like these,
00:01:44	but they have the potential
00:01:44	to put serious strain
00:01:47	on the electric grid
00:01:47	and other natural resources.
00:01:50	When a place
00:01:50	gets some momentum,
00:01:52	the momentum keeps coming.
00:01:53	And so there's
00:01:53	a good combination
00:01:54	of a talent pool here,
00:01:56	an affordable business
00:01:56	climate, affordable land.
00:02:00	And then it just kind of,
00:02:00	builds on itself.
00:02:03	Google
00:02:03	is just one of the big names
00:02:05	with data centers
00:02:05	that dot central Ohio.
00:02:07	But it wasn't the first, and
00:02:07	it likely won't be the last.
00:02:10	According
00:02:10	to tracking site Back
00:02:12	Stoll,
00:02:12	Columbus is the site of 71
00:02:14	data centers
00:02:14	already across 31 tech firms.
00:02:17	Congressional
00:02:17	and local leaders
00:02:19	listen to the latest
00:02:19	investment announcement
00:02:21	in the middle of a week
00:02:22	long heat
00:02:22	wave Tuesday morning,
00:02:24	in the shade of a tent
00:02:24	with standalone
00:02:25	air conditioners
00:02:25	buzzing in the background.
00:02:28	Lieutenant Governor
00:02:28	John Husted says
00:02:29	the heat is just one
00:02:31	reminder
00:02:31	of the potential pressures
00:02:32	the facilities can put on
00:02:32	a region announced
00:02:34	from Microsoft and AWS
00:02:34	and meta.
00:02:39	They're all demand
00:02:39	a lot of electricity,
00:02:42	and they demand a lot of water
00:02:43	for cooling,
00:02:43	on days like this.
00:02:46	And so we have to have
00:02:46	a balance.
00:02:48	The electricity demands
00:02:48	alone are staggering.
00:02:52	We are literally in constant
00:02:52	communications with AEP.
00:02:57	American Electric Power Ohio
00:02:57	President Mark Reiter says e
00:03:00	will double its peak
00:03:01	demand in the state by 2028,
00:03:01	largely due to data centers.
00:03:05	Because of that,
00:03:05	it put a pause on
00:03:07	any new contracts
00:03:07	with possible projects
00:03:09	more than a year ago to avoid
00:03:09	damaging the electric grid.
00:03:12	We saw,
00:03:12	where this was headed,
00:03:16	and we did not want to,
00:03:16	compromise
00:03:19	the integrity of the grid.
00:03:20	Now it's proposing levying
00:03:20	a tariff on the facilities,
00:03:23	making them commit to paying
00:03:23	90% per month of the energy
00:03:27	they say they'll use,
00:03:27	even if they use less.
00:03:30	Ryder says
00:03:30	that would cover the costs
00:03:32	of constructing new extra
00:03:32	high voltage
00:03:34	transmission lines
00:03:34	to accommodate them.
00:03:36	Trade association
00:03:36	the Datacenter Coalition says
00:03:39	it's still reviewing API's
00:03:39	proposed plans.
00:03:41	But in a statement,
00:03:42	a spokesperson said
00:03:42	it has, quote, concerns
00:03:45	with any utility proposal
00:03:45	that singles out
00:03:47	a specific industry,
00:03:47	does not reflect
00:03:49	a public or transparent
00:03:49	stakeholder process,
00:03:52	and could have
00:03:52	a significant impact
00:03:53	on data center and digital
00:03:53	infrastructure investment.
00:03:57	In the meantime, interested
00:03:58	tech firms
00:03:58	have been signing on
00:03:59	to a waitlist
00:03:59	with AEP and it's long.
00:04:02	So in the context
00:04:03	of New York City,
00:04:03	with a peak demand of 12GW,
00:04:07	we have nearly three
00:04:07	New York cities,
00:04:10	with interest,
00:04:10	in central Ohio.
00:04:14	Google's announcement
00:04:14	wasn't for new data centers,
00:04:17	just investments
00:04:17	in what already exists
00:04:19	or is under construction.
00:04:20	And it was already under
00:04:20	contract with AEP.
00:04:23	You know, Google's been here.
00:04:25	They're a great customer.
00:04:26	They have delivered on their
00:04:26	commitments from a, energy
00:04:30	requirement perspective.
00:04:31	And Google says it wants to be
00:04:31	in on the discussion
00:04:34	because if there's more
00:04:35	energy, central
00:04:35	Ohio grows more.
00:04:37	And,
00:04:37	that's good for the community.
00:04:39	It's good for us, too.
00:04:40	So part of it is we just want
00:04:40	to lean into the issue.
00:04:43	Houston says they have to.
00:04:45	The Public Utilities
00:04:46	Commission of Ohio
00:04:46	is currently
00:04:48	considering the tariff
00:04:48	proposal out of AEP.
00:04:50	Sara Donaldson, Statehouse
00:04:50	News Bureau.
00:04:53	Property
00:04:53	taxes are still a hot issue
00:04:55	with the second half
00:04:55	of the year bills coming due
00:04:58	to House.
00:04:59	Republican
00:04:59	lawmakers have proposed
00:05:01	putting an amendment
00:05:01	before voters
00:05:03	to limit property
00:05:03	tax increases to 4% per year.
00:05:07	Sponsors Scott Whigham
00:05:08	and Beth Lehrer said
00:05:08	it would work
00:05:10	like a throttle on property
00:05:10	tax increases, which they say
00:05:13	have soared 30% in some areas.
00:05:16	Backers of the amendment
00:05:17	say it
00:05:17	isn't likely
00:05:17	to come about this year
00:05:19	because a supermajority
00:05:19	of lawmakers
00:05:21	would have to pass it
00:05:21	by August 7th
00:05:23	to put it before
00:05:23	voters in November.
00:05:26	And it's just one of more
00:05:27	than a dozen pieces
00:05:27	of legislation
00:05:29	that seek to deal
00:05:29	with property taxes.
00:05:31	Introduced this session
00:05:31	on expanding the homestead
00:05:34	tax exemption, giving credits
00:05:34	to certain lower
00:05:37	and middle income property
00:05:37	tax payers and renters,
00:05:40	freezing
00:05:40	the property tax for seniors,
00:05:43	eliminating
00:05:43	replacement school levies,
00:05:45	and changing the lookback
00:05:45	that's used to review property
00:05:48	taxes to three years
00:05:48	instead of one year.
00:05:51	a joint bipartisan committee
00:05:51	created in the two year
00:05:54	state budget has been hearing
00:05:54	input on those bills.
00:05:56	And what led up
00:05:56	to the situation, Ohio.
00:05:59	And now with a hot housing
00:05:59	market, home values soaring,
00:06:02	more levies on the ballot
00:06:02	than in any other state,
00:06:05	and the Ohio Association
00:06:05	of Realtors, with a 2022 study
00:06:09	showing 1 in 6 homes in Ohio,
00:06:09	is selling to a corporation.
00:06:14	Republican Senator Bill
00:06:14	blessing co-chairs
00:06:16	that committee.
00:06:17	it gets down to the matter
00:06:17	of what what got us here
00:06:21	and what are we going to do
00:06:21	to solve the problem?
00:06:24	And I kind of feel like the
00:06:24	three year average is sort of,
00:06:27	you know,
00:06:27	putting gasoline onto a fire.
00:06:30	And what I mean by that is the
00:06:32	the real problem here
00:06:32	is, yes, taxes are high
00:06:35	because valuations are high,
00:06:35	valuations are high
00:06:38	because home prices
00:06:38	truly are high.
00:06:40	So what you want to do
00:06:40	is ensure
00:06:43	that the housing market
00:06:43	doesn't continue to rage.
00:06:46	And in fact,
00:06:46	it would be nice to see home
00:06:48	prices and rents
00:06:48	actually fall,
00:06:50	which by extension
00:06:50	over time, valuations
00:06:53	and then property taxes
00:06:53	would then fall.
00:06:56	The reason that the two things
00:06:56	that can be done
00:06:59	in order to do
00:07:00	that,
00:07:00	are increasing
00:07:00	the housing supply,
00:07:03	because we've had
00:07:03	an under build
00:07:04	since the great
00:07:05	financial recession,
00:07:05	as well as going after
00:07:08	the institutional housing
00:07:08	investors.
00:07:10	And I think
00:07:10	between those two things,
00:07:12	that would be the best
00:07:12	remedy long term, short term
00:07:16	doing that.
00:07:16	Homestead exemption targets,
00:07:18	low and middle income
00:07:18	seniors on fixed income
00:07:21	who are truly the most
00:07:22	vulnerable populations
00:07:22	with respect to inflation.
00:07:25	The reason why the three year
00:07:25	valuation average
00:07:27	isn't that great of an idea
00:07:27	is in the sense that
00:07:30	it reduces valuations
00:07:30	and because of that,
00:07:33	everybody's property, taxes
00:07:33	will then go down.
00:07:38	but what happens
00:07:38	is, is when you have a fixed
00:07:41	amount of housing,
00:07:41	really like in the moment
00:07:44	you have more, more money
00:07:44	now chasing the same
00:07:47	housing stock.
00:07:48	It's just going to inflate
00:07:48	housing prices.
00:07:51	And then after three years,
00:07:51	when that,
00:07:54	three year valuation
00:07:54	average legislation runs out
00:07:57	because remember,
00:07:57	it's temporary.
00:07:59	you've made the problem worse
00:07:59	and then boom,
00:08:03	you've just jumped
00:08:03	back up the true value.
00:08:05	And I think that is
00:08:05	a major problem.
00:08:06	The property tax burden
00:08:06	has shifted dramatically away
00:08:10	from business and commercial
00:08:10	taxpayers and onto residential
00:08:13	and agricultural taxpayers
00:08:13	since 1975.
00:08:16	Residential property made up
00:08:16	48% of the school's tax base.
00:08:20	Then now at 72%.
00:08:22	that's a result of a lot of
00:08:22	different factors here. But
00:08:26	essentially this
00:08:26	has been good for businesses,
00:08:28	but bad for homeowners and
00:08:28	agricultural property owners.
00:08:32	Absolutely.
00:08:33	And that, I think, is, is the
00:08:36	the result of
00:08:36	not just the state,
00:08:38	but I think the locals
00:08:38	are involved with this too.
00:08:40	And, you know, I apologize
00:08:40	it just came out this morning,
00:08:43	Jim Weicker had an article
00:08:43	about this, the number of,
00:08:46	you know, how abatements are
00:08:46	impacting, Franklin County,
00:08:50	I think Franklin
00:08:50	County auditor.
00:08:52	Michael Siano
00:08:52	had some comments on that.
00:08:54	What can be done?
00:08:55	But overall, what's happening
00:08:55	is with these various,
00:08:59	abatements, Community
00:08:59	Reinvestment Act tips,
00:09:02	you name it, it's
00:09:02	reducing the property tax base
00:09:07	and schools, counties,
00:09:07	local political subdivisions.
00:09:11	You know,
00:09:11	they need X amount of money.
00:09:13	you know,
00:09:13	if that pie is shrinking,
00:09:16	the rate
00:09:16	that they have to levy
00:09:18	to get the amount of money
00:09:18	that they need has to go up.
00:09:21	So what's happening
00:09:22	is the property tax burden
00:09:22	is shifting on to those folks
00:09:26	who haven't gotten abatements.
00:09:28	And that is another
00:09:28	major problem
00:09:30	as to why property
00:09:30	taxes are so high.
00:09:32	And we
00:09:33	I'm hopeful that that property
00:09:33	tax committee will address
00:09:36	that, because again,
00:09:36	that's the other issue
00:09:38	outside of,
00:09:39	you know, the housing supply,
00:09:40	an institutional housing
00:09:40	investor issue,
00:09:42	because certainly tax
00:09:42	abatements
00:09:43	are local tax abatements,
00:09:45	but they are authorized
00:09:45	by state law.
00:09:46	have been okay with, tax
00:09:46	And Republican lawmakers
00:09:50	abatements on businesses.
00:09:51	They've updated the laws
00:09:51	recently even. Yes.
00:09:54	And I think that they are
00:09:55	going to have to take another
00:09:55	look at that.
00:09:57	and it's encouraging
00:09:57	with that, committee,
00:10:00	you know,
00:10:00	myself, representative,
00:10:03	Tom young was also,
00:10:03	concerned about the,
00:10:07	you know,
00:10:07	abatements and exemptions
00:10:08	and how they're
00:10:08	impacting this.
00:10:09	So I, I'm hopeful that there's
00:10:09	that there's a shift
00:10:13	in thinking with respect
00:10:13	to the amount of exemptions
00:10:15	and whatnot that are doled out
00:10:15	at the state level.
00:10:18	And I certainly know that
00:10:18	that's the case
00:10:19	at the local level as well.
00:10:20	And to put a number on that,
00:10:20	the state says $9.2 billion
00:10:23	was exempt from taxation
00:10:23	because of abatements
00:10:26	offered by local governments,
00:10:26	which are authorized by
00:10:29	state law.
00:10:30	I want to ask you about
00:10:31	the institutional investors
00:10:31	that you mentioned this.
00:10:33	there are a lot of companies,
00:10:33	entities that are buying up
00:10:38	what is essentially limited
00:10:38	housing stock.
00:10:41	And how is that affecting
00:10:41	what's happening,
00:10:44	in terms of value?
00:10:45	And what can you even do
00:10:45	about that?
00:10:47	I mean, you can't stop them
00:10:47	from buying, can you? So.
00:10:50	Well, there's
00:10:50	ways to get at that. But,
00:10:53	yeah.
00:10:53	So what's, what's going on
00:10:54	is they will target certain
00:10:54	neighborhoods.
00:10:56	They're typically lower
00:10:56	income neighborhoods,
00:10:58	as the so-called
00:10:58	or maybe not even that,
00:11:01	what you would normally think
00:11:01	of as like, starter homes
00:11:04	at one at one time, like,
00:11:04	the small, you know,
00:11:07	Cape Cods or ranches
00:11:07	and whatnot, that were built,
00:11:10	you know, 40s, 50s and 60s,
00:11:10	after World War two.
00:11:15	And, you know,
00:11:15	folks in the housing community
00:11:18	that try to defend them
00:11:18	will say, well, there's
00:11:20	such a small
00:11:21	percentage overall,
00:11:21	you know, in the state.
00:11:24	Well, you know,
00:11:24	past 3 or 4 years, 20%
00:11:28	or more of the purchases
00:11:28	have been
00:11:29	by these
00:11:29	institutional entities.
00:11:32	in addition,
00:11:32	the neighborhoods
00:11:33	that they target,
00:11:33	they targeted
00:11:35	target them heavily,
00:11:35	and they will,
00:11:37	you know, outbid
00:11:38	anybody that they can trying
00:11:40	to get Ahold
00:11:40	of these properties.
00:11:41	And as you can imagine,
00:11:42	that massive demand
00:11:42	in that concentrated area
00:11:46	jacks up the
00:11:46	the prices of homes
00:11:49	in that area and consequently,
00:11:49	the valuations and actually,
00:11:52	now that I think about it,
00:11:52	that would spill over into,
00:11:55	you know, if you happen to be
00:11:55	a senior in that community,
00:12:00	your valuations are going to
00:12:01	go up
00:12:01	because of that activity.
00:12:03	Now, there are a number
00:12:04	of of things that, you know,
00:12:04	I have pushed to try
00:12:07	to get at these guys,
00:12:07	whether it's Senate Bill 76,
00:12:10	which sought to,
00:12:10	you know, basically say, look,
00:12:14	you can only own 50, homes
00:12:14	in a, in a single county.
00:12:19	And if you do beyond that,
00:12:19	there's a tax on that such
00:12:23	that it would force you
00:12:23	then to start selling these,
00:12:25	these homes.
00:12:26	The idea was
00:12:27	it was sort of an antitrust
00:12:27	in spirit bill
00:12:30	that nobody should own
00:12:30	that many entities
00:12:32	or that should own
00:12:32	that many homes
00:12:34	because of the effects
00:12:36	that it has
00:12:36	on its political economy.
00:12:37	And it also shed some light
00:12:39	on, you know, how
00:12:39	they operate,
00:12:42	you know, with 90 plus LLCs
00:12:42	and nobody can really get
00:12:45	an idea who owns what.
00:12:48	but I think,
00:12:48	you know, going forward,
00:12:50	you know,
00:12:50	this is going to be an issue
00:12:53	that I think
00:12:53	the General Assembly
00:12:54	is going to have to deal with
00:12:54	at some point
00:12:56	as they start seeing
00:12:56	homeownership rates drop.
00:13:00	And what that means for Ohio.
00:13:02	The committee is going to
00:13:02	look at the 20 mill floor,
00:13:03	which is really complicated
00:13:03	for people to understand.
00:13:06	But basically it would
00:13:07	restrict the revenue
00:13:07	growth for districts
00:13:10	that are at the floor.
00:13:11	And about half of those
00:13:11	districts are poor districts.
00:13:13	So won't this just mean
00:13:14	more levies
00:13:14	that they will have trouble
00:13:16	if not very, very difficult,
00:13:16	almost impossible to pass.
00:13:20	So if
00:13:21	we lowered the floor, yes,
00:13:22	I think that would be
00:13:22	very problematic.
00:13:24	I don't think there's any will
00:13:24	in the legislature for that.
00:13:27	And, you know, the reason
00:13:27	that a lot of these districts
00:13:31	are on the floor
00:13:31	is because of these rising
00:13:33	valuation patterns
00:13:33	that have dropped
00:13:35	the effective millage
00:13:35	down to that 20 mills.
00:13:37	And the reason that that
00:13:39	20 mill floor was in place
00:13:39	is because of the school
00:13:42	funding formula.
00:13:43	There was the thinking
00:13:43	that it needs to be
00:13:46	sort of shared between,
00:13:46	you know, local and state.
00:13:49	You got to pitch in.
00:13:50	Some will pitch in
00:13:50	some as well.
00:13:52	And when it comes to
00:13:52	what you can do with things
00:13:55	like the 20 mill floor
00:13:55	and phantom revenue
00:13:58	and all these things, house
00:13:58	Bill 920,
00:14:00	all of these things
00:14:00	that are part
00:14:02	of the discussion on school
00:14:02	funding and property taxes
00:14:05	are you limited on what can be
00:14:05	done by the Constitution,
00:14:08	and is there a possibility
00:14:10	that you're going to have
00:14:10	to amend the Constitution
00:14:12	to do some of the things
00:14:12	you want to do?
00:14:14	no question.
00:14:15	that then that exact question
00:14:15	was asked in committee,
00:14:18	about that.
00:14:19	And, you know,
00:14:19	I think it was Sam Benham
00:14:21	with LSC didn't
00:14:21	have the greatest answer
00:14:25	in terms of what I would start
00:14:25	putting up
00:14:29	against the Constitution
00:14:29	and what wouldn't.
00:14:30	But but no,
00:14:30	you're absolutely right.
00:14:32	And as you can imagine,
00:14:32	trying to do something,
00:14:36	you know, legislatively
00:14:37	at the same time
00:14:37	that you're doing it,
00:14:39	you know,
00:14:39	you're putting something
00:14:39	on the ballot to be put into
00:14:41	the Constitution
00:14:41	is a tremendously high bar.
00:14:44	And if we were going
00:14:44	to do something like that,
00:14:47	it would have to have
00:14:47	broad bipartisan support,
00:14:51	not just in the General
00:14:51	Assembly, but amongst,
00:14:53	Ohioans generally.
00:14:55	But, you know, the thing is,
00:14:55	with all of this, that
00:14:58	six years ago,
00:14:59	nobody was really talking
00:14:59	about this sort of thing.
00:15:01	And it just goes to show you
00:15:01	that only because of,
00:15:05	you know, sort
00:15:05	of the housing market issues
00:15:09	and then this being downstream
00:15:09	from that,
00:15:11	that we're hearing about it
00:15:11	today.
00:15:13	So I really question
00:15:13	the need to do
00:15:17	really major changes in this,
00:15:17	even though it's complicated.
00:15:21	That may be,
00:15:21	but it does tend to work.
00:15:23	It's just because
00:15:23	of the housing market
00:15:26	that we're in, the situation
00:15:26	that we are.
00:15:27	Democrat Dan
00:15:27	Troy was the House member
00:15:29	who suggested a committee
00:15:31	to look into property
00:15:31	tax law changes
00:15:33	in the previous
00:15:33	General Assembly.
00:15:34	He's now on the committee.
00:15:36	His idea inspired.
00:15:38	I think we have to realize
00:15:38	that,
00:15:40	property taxes,
00:15:40	unlike income taxes,
00:15:43	which some of my colleagues
00:15:43	have said,
00:15:44	let's get rid of the state
00:15:44	income tax.
00:15:47	we've had
00:15:48	a graduated income tax
00:15:48	in this country since 1913.
00:15:51	It's a fair
00:15:51	method of taxation
00:15:51	because if you
00:15:54	make more money,
00:15:54	you pay a little bit more.
00:15:56	If you don't make that much,
00:15:56	you're not burdened as much.
00:15:58	Property
00:15:58	taxes does not address that.
00:16:01	You can be property
00:16:01	rich and income poor.
00:16:04	And so what we really need
00:16:04	to do is kind of
00:16:08	keep those those tax revenues
00:16:08	coming in at the state level,
00:16:12	but use a lot of those dollars
00:16:13	to buy circuit breakers for
00:16:13	people on their property tax,
00:16:17	drastically increase
00:16:17	the homestead exemption, help
00:16:19	those people
00:16:19	that have difficulty to pay.
00:16:22	And we can do that
00:16:22	with state money,
00:16:24	but we can't do it
00:16:24	if we're just going to
00:16:26	basically, jettison
00:16:26	a lot of this state revenue.
00:16:29	I mean, so so I'm hopeful
00:16:29	that we can, you know,
00:16:31	look at that and say, let's,
00:16:33	let's bring property
00:16:33	tax relief and let's
00:16:36	bring tax relief
00:16:36	to those that really need it.
00:16:38	There are a couple of bills
00:16:38	that would do
00:16:40	some of that targeted
00:16:40	tax relief
00:16:41	or temporary quick relief
00:16:41	in a way.
00:16:44	You've got house Bill 187
00:16:44	providing
00:16:46	three years of property
00:16:46	tax relief for seniors.
00:16:48	263 A property
00:16:48	tax freeze for homeowners over
00:16:51	70 making under $70,000
00:16:51	in income.
00:16:53	The 70 under 70 plan, 270
00:16:53	for another homestead
00:16:57	tax exemption for certain
00:16:57	long term homeowners.
00:17:00	But Senator Bill blessing,
00:17:00	who's the co-chair of this
00:17:02	committee, which, by the way,
00:17:02	this was your idea,
00:17:04	this committee,
00:17:05	he has said that,
00:17:05	there might be a problem
00:17:08	in making these
00:17:09	short term changes
00:17:09	when really long term issues
00:17:13	need to be addressed.
00:17:14	And he's worried
00:17:14	about the impact
00:17:15	of these short term changes.
00:17:16	So how do you get quick
00:17:18	relief for homeowners who are
00:17:19	looking at their tax bills now
00:17:19	and saying,
00:17:21	I can't afford this
00:17:21	or I'm concerned?
00:17:24	Well, I think
00:17:24	and that was
00:17:25	one of the purposes
00:17:25	of the committee is,
00:17:26	first of all, the first part
00:17:26	of his education.
00:17:28	First of all,
00:17:28	we have got to understand
00:17:30	how this system works.
00:17:31	We need to educate ourselves,
00:17:33	the public,
00:17:33	as to how this system works
00:17:35	and then figure out, you know,
00:17:35	what is the fairest
00:17:37	method to do that
00:17:37	we should not do it piecemeal.
00:17:40	We should basically say that,
00:17:43	you know, we're
00:17:43	going to create a permanent,
00:17:45	inflationary, increasing,
00:17:47	circuit breaker
00:17:47	for those people
00:17:50	who are struggling
00:17:51	and want to remain
00:17:51	in their homes
00:17:53	but really don't have the
00:17:54	wherewithal to to, you know,
00:17:54	address their property
00:17:58	tax burden.
00:17:59	I think we can also impact
00:17:59	on the spending side.
00:18:03	That property
00:18:03	tax burden by the state
00:18:05	may be picking up a little bit
00:18:05	more and stop shifting
00:18:08	more and more responsibility
00:18:08	back to the local governments
00:18:11	on some of these
00:18:11	very important programs
00:18:14	that are very contributory
00:18:16	to what we consider
00:18:16	a civilized society.
00:18:18	and also,
00:18:18	maybe take a look at,
00:18:22	as I've said before,
00:18:23	and I co-chaired a commission
00:18:23	about 12 years ago
00:18:25	on local government
00:18:25	reform and collaboration.
00:18:28	Maybe we need to look
00:18:28	at some consolidation or some,
00:18:31	streamlining of a lot of our
00:18:31	local governments to say,
00:18:35	let's not keep trying
00:18:35	to fund the service model
00:18:38	the way it exists today.
00:18:40	Maybe let's change
00:18:40	the service model
00:18:42	to reflect the realities
00:18:44	of the fact that we just can't
00:18:44	keep banging on people
00:18:47	for more and more property
00:18:47	taxes.
00:18:48	That's interesting,
00:18:48	because that's an idea
00:18:50	that, former
00:18:51	Republican former Governor
00:18:52	John Kasich talked about
00:18:52	when he was cutting
00:18:54	the local government
00:18:54	fund is streamlining
00:18:55	local government
00:18:55	and consolidating services.
00:18:57	And here you're talking about.
00:18:58	Well, I just think it makes
00:18:58	I mean, I'm, I'm,
00:19:00	I consider myself
00:19:00	a conservative Democrat.
00:19:03	But I've said that
00:19:04	the problem
00:19:04	with so many governments
00:19:05	is that there's so much
00:19:05	overhead in the government.
00:19:08	You gotta have a director,
00:19:09	you gotta have a payroll
00:19:09	person, you gotta have a
00:19:11	legal counsel,
00:19:11	you gotta have an office,
00:19:13	you gotta have, H.R.
00:19:14	person and all that
00:19:14	and all of that overhead
00:19:17	is not getting any services
00:19:17	to the citizens out there.
00:19:21	We need to maybe consolidate
00:19:21	some of that overhead
00:19:24	into more
00:19:24	centralized approaches
00:19:25	so that we can get
00:19:25	more dollars out there
00:19:27	on the front line
00:19:28	to provide the services
00:19:28	that the citizens really need.
00:19:31	The property
00:19:31	tax burden has shifted
00:19:33	dramatically away
00:19:33	from businesses
00:19:35	and commercial taxpayers
00:19:35	to residential
00:19:37	and agricultural taxpayers
00:19:37	since 1975.
00:19:40	Then residential property
00:19:40	made up
00:19:42	48% of the school's
00:19:42	tax base, now at 72%.
00:19:45	That's a result of zero out
00:19:46	the tangible
00:19:46	personal property tax.
00:19:48	And, that's on businesses
00:19:48	there.
00:19:51	Also exemptions
00:19:52	like $9 billion
00:19:54	worth of exemptions
00:19:54	that, are offered
00:19:56	by local governments.
00:19:58	The state often also offer
00:19:58	some exemptions as well.
00:20:01	But Senator Blessing has said
00:20:01	he's concerned about that.
00:20:03	But that seems to be the way
00:20:03	that Republicans in particular
00:20:07	have talked
00:20:07	about keeping business here
00:20:07	and bringing business here.
00:20:11	Other states
00:20:11	have these incentives.
00:20:12	We have to do them, do
00:20:13	well, as I said
00:20:13	in this morning's, committee,
00:20:16	we had a meeting.
00:20:17	I said, now let's go back to
00:20:18	when enterprise zones
00:20:18	were enterprise
00:20:20	zones were Ronald Reagan
00:20:20	standing
00:20:22	in the middle of the South
00:20:22	Bronx
00:20:23	in the 1980 campaign, saying,
00:20:25	we need some sort of
00:20:25	government program
00:20:27	that creates
00:20:27	economic opportunity
00:20:30	in an area like this
00:20:30	that normally would not happen
00:20:34	to, to allow economic
00:20:34	opportunity for the citizens
00:20:37	who live in an area like this.
00:20:39	And these things
00:20:40	should really be be reined in
00:20:40	so that they,
00:20:43	they all have to meet the
00:20:43	but for doctrine,
00:20:46	but for the existence
00:20:46	of this tax abatement,
00:20:49	this economic development
00:20:49	cannot happen.
00:20:51	I think right now,
00:20:51	these things are
00:20:54	these things should be used in
00:20:54	extraordinary circumstances.
00:20:57	They are used
00:20:57	across the board.
00:20:59	I mean, it's it's,
00:21:00	you know,
00:21:00	they're used in areas
00:21:02	that really aren't struggling.
00:21:03	And so, so yes,
00:21:03	we definitely have shifted
00:21:07	so many property
00:21:07	taxes are going to be paid.
00:21:09	But what has happened
00:21:09	here is more and more of
00:21:11	those property
00:21:11	taxes have been shifted
00:21:14	to the homeowners
00:21:14	burden and less and less
00:21:17	to the business concerns.
00:21:18	I mean, I think somebody said
00:21:18	21% of the business property
00:21:22	in Ohio
00:21:22	is exempt from property taxes.
00:21:25	And so
00:21:25	I think we really need to
00:21:28	and all of the county auditors
00:21:28	that came in from around
00:21:30	the state to testify,
00:21:31	Democrats and Republicans,
00:21:31	all said
00:21:34	that is a significant problem.
00:21:36	The amount of money that is
00:21:36	removed from our taxable base
00:21:40	certainly requires us to be
00:21:40	a little bit more, that,
00:21:44	you know, demanding and on
00:21:44	homeowner property taxes.
00:21:48	The upshot of all
00:21:48	that is pretty much
00:21:50	that taxpayers, more as more
00:21:50	taxpayers are exempt,
00:21:53	that makes a smaller
00:21:53	pool of taxpayers who pay
00:21:57	and therefore
00:21:57	they're paying more. Right?
00:21:59	Yeah, that that's the case
00:21:59	with any taxation.
00:22:01	You know,
00:22:01	I mean, it's like a win win.
00:22:03	I, you know,
00:22:04	we're we're starting to
00:22:04	what concerns me
00:22:07	by getting rid of the state
00:22:07	income tax
00:22:08	and getting rid of the
00:22:08	commercial activities, taxes.
00:22:11	I've been doing government
00:22:11	for a long time,
00:22:13	and I like the diversified
00:22:13	revenue stream.
00:22:15	So I put all my eggs
00:22:15	in one basket,
00:22:17	and we start putting
00:22:17	all our eggs in one basket.
00:22:20	You know, we're going
00:22:20	to be very dependent on that.
00:22:22	So I think what
00:22:22	what you have to do is
00:22:25	you have to make sure
00:22:25	that the,
00:22:27	you know, the application
00:22:28	of the taxation is uniform
00:22:28	and as fair as possible.
00:22:31	I think that is
00:22:31	I mean, nobody,
00:22:33	nobody likes taxation,
00:22:33	everybody hates taxation.
00:22:35	But unfortunately,
00:22:36	if we want to provide
00:22:36	the services
00:22:38	that we consider essential
00:22:38	to a civilized society,
00:22:42	we're going to need some level
00:22:42	of revenue to to do that.
00:22:44	And I think it's imperative
00:22:44	for us
00:22:47	to make sure that we do that
00:22:47	as fairly as possible,
00:22:51	and then we make sure
00:22:52	the load
00:22:52	is nobody's overburdened,
00:22:54	but make sure
00:22:54	nobody's under burden.
00:22:56	Senator Blessing has said one
00:22:56	of the biggest problems here
00:22:59	is that the housing market
00:22:59	is out of whack,
00:23:00	and housing needs to be dealt
00:23:02	with in the property
00:23:02	tax question.
00:23:03	There is just not enough
00:23:03	supply to go around
00:23:05	and that's driving up costs.
00:23:07	So how on earth
00:23:07	do you fix that?
00:23:08	Especially if
00:23:08	you're trying to do something
00:23:11	fairly quickly?
00:23:12	Well, I think representing
00:23:12	plastic fields,
00:23:14	rising property
00:23:15	values are going up
00:23:15	is because we do have
00:23:16	a shortage
00:23:16	of housing and all that.
00:23:18	So I but I think you have to
00:23:18	be careful,
00:23:20	you know,
00:23:20	sometimes when we have
00:23:20	a shortage of housing,
00:23:22	someone says, well,
00:23:23	let's just create this huge
00:23:23	community reinvestment area
00:23:26	so that they'll build
00:23:26	more houses
00:23:28	because they'll be tax exempt
00:23:29	for the next 15 or 30 years
00:23:29	and stuff.
00:23:31	The problem with
00:23:31	that is that, you'll hear
00:23:33	all of the statistical data
00:23:33	that says raise for every
00:23:37	or every dollar in taxes that
00:23:37	residential property pays.
00:23:40	It utilizes about $1.4,
00:23:40	in, in services,
00:23:45	government services.
00:23:46	So, you know,
00:23:46	to give tax abatements
00:23:48	for residential development,
00:23:48	I don't think is a wise,
00:23:51	situation
00:23:53	because you're creating more
00:23:53	demand on, on tax, spending
00:23:53	entities, the schools,
00:23:57	a lot of the other programs
00:23:57	in that.
00:24:00	So I think that, you know,
00:24:00	we just need to,
00:24:03	you know, ensure that,
00:24:04	you know, we can
00:24:04	we can generate
00:24:05	more affordable
00:24:05	housing in the state of Ohio.
00:24:08	you know, and I think that's
00:24:08	one of the problems.
00:24:10	I mean, there's quite a
00:24:11	bit of housing going
00:24:11	on, a development in my area.
00:24:14	But, you know,
00:24:14	when someone you look
00:24:15	at some of the prices
00:24:15	there, they'll say is this,
00:24:17	you know, is this
00:24:17	really affordable housing?
00:24:19	So I think that's that's
00:24:19	part of the issue.
00:24:22	but I don't think
00:24:22	that's a solution.
00:24:24	And then if we, you know,
00:24:26	if we really grow
00:24:27	the housing market, it's
00:24:27	going to take care of,
00:24:29	property tax value because we,
00:24:29	you know, we want people
00:24:32	once you've made the mayor
00:24:32	just a single investment
00:24:34	you probably make in
00:24:34	your lifetime and a new house
00:24:36	you want,
00:24:36	you want that investment
00:24:38	to, to inflate and value
00:24:38	and all that.
00:24:41	we just have to
00:24:41	somehow say that,
00:24:43	we ought to make sure
00:24:43	that while we're
00:24:45	that inflation
00:24:45	is taking place, that somehow
00:24:48	your property tax burden
00:24:48	is protected or modified,
00:24:52	so that,
00:24:52	you're not paying commensurate
00:24:54	with that increase in value.
00:24:56	Blessing tells me the finance
00:24:56	staffers working on
00:24:58	that committee have also been
00:24:58	tied up with the $4 billion
00:25:02	capital budget, likely
00:25:02	the largest in state history,
00:25:05	which should be voted out
00:25:05	next week.
00:25:07	Blessing expects the committee
00:25:07	to regroup with the goal
00:25:10	of releasing recommendations
00:25:10	in July or August.
00:25:14	And that is it for this week
00:25:14	for my colleagues
00:25:15	at the Statehouse News
00:25:15	Bureau of Ohio
00:25:17	Public Radio and Television.
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Note : Transcripts are compiled from uncorrected captions