Ohio’s Republican-controlled state legislature has long been friendly to business interests, even as some conservative groups have joined liberal groups in calling on the state to end niche tax loopholes over the past decade.
But a vote last month to eliminate a property tax break for landlords marks the second time GOP lawmakers have closed one of these loopholes in recent months.
Shortly before passing Ohio House Bill 186, a sweeping property tax bill, lawmakers amended it to nix the “nonbusiness” property tax credit received by landlords and other residential property holders who don’t live in the homes they own.
The new language also includes a corresponding tax cut – via an expansion of the “owner occupancy tax credit” – for homeowners.
The change effectively raises taxes on landlords by $400 million, once it’s fully phased in four years from now, while cutting them for homeowners by the same amount. The state funds the tax credits by giving money directly to schools and other local governments to cover their cost.
The change won warm praise and support from Democrats.
It also represents a big political win for Sen. Lou Blessing, a Cincinnati Republican who has more progressive views on housing issues. He’d previously proposed eliminating the landlord tax break as a standalone bill.
“This is legit property tax relief for every homeowner in Ohio,” Blessing said in an interview.
The legislature also voted over the summer to raise taxes on data centers by adding language to the state budget bill eliminating a longstanding sales tax break on the expensive hardware at the core of their operations.
But Gov. Mike DeWine ended up rescuing data centers by nixing the language – and that’s what the real estate investment industry hopes he’ll do again this time. He could do this without axing all of HB186 – which is supposed to cut future property taxes by more than $2 billion – through what’s called a line-item veto. The governor should decide whether or not to sign the bill and others the GOP legislature recently passed into law later this month.
“There’s other ways to get better real estate tax savings to homeowners than to put it on the back of renters and business owners,” Ohio Real Estate Investors Association President Scott Ellsworth said in an interview.
The OREIA argues the tax increase will either lead landlords to hike rents – the group is emphasizing this possibility in its public statements – or eat the cost themselves. Ellsworth said the median landlord owns two rental properties, and makes a narrow profit on their investment.
What this means for you
Breaking down the potential tax savings for individual homeowners is tricky, since the amount depends not only on a property’s individual value but also on whether voters approved local tax levies prior to a 2013 law change.
If you want to figure it out, you can look at your tax bill to see the amount you currently save from the owner occupancy and nonbusiness tax credit. Multiply that number by two – since your tax bill comes out twice a year – and then multiply it again by 1.0298.
For a landlord, the tax hike eventually will equal 10% of their tax bill.
NORML wants a Senate veto on marijuana bill
The longest-standing marijuana advocacy organization in the U.S. wants the Ohio Senate to kill a bill that will impose new penalties on marijuana smokers and establish a comprehensive set of rules on the intoxicating hemp industry.
NORML’s national political director, Morgan Fox, told Jake Zuckerman that SB 56 creates criminal penalties for pot smokers who fail to keep their marijuana in original, unopened packaging or import it from the much cheaper dispensaries of Michigan or other states.
“A lot of these things are completely nonsensical,” Fox said. “This is recriminalizing a lot of behavior that is relatively innocuous and has been legal for some time.”
The bill, which the Senate is set to approve on Tuesday, would also strip legal protections for pot smokers in civil or administrative contexts like custody hearings or professional licensing disputes. You can read about it in Jake’s story here.
Possible Democratic congressional recruit staying put
A big way to tell what Ohio Democrats really think about their chances for next year’s election is to watch which candidates decide to run for which office.
One such tea leaf arrived last week, when a potential top contender for the 7th Congressional District in the Cleveland area decided to stay put.
State Rep. Sean Brennan, of Parma, wrote in a Nov. 26 social media post that after conversations with his wife, friends, local community leaders and others, he’d decided to run for reelection.
The decision isn’t exactly surprising. Under Ohio’s term-limits rules, Brennan can run twice more for his current seat. A congressional run would be a far bigger risk: Trump won the 7th District by 11 points last year, compared with just a one-point margin in Brennan’s current state House district. Brennan, meanwhile, won reelection by 16 points.
But Democrats had viewed Brennan as a potential top-tier recruit for the 7th District, currently represented by Republican Rep. Max Miller of Rocky River. Some local Democrats felt Brennan gave a congressional run more serious consideration after the party’s strong showings in the November midterm elections in New York, New Jersey and Virginia. Democratic officials are continuing their search for another candidate to run against Ed FitzGerald, the former Cuyahoga County executive and 2014 gubernatorial nominee, in the May primary election.
In text messages, Brennan said the call ultimately came down to enjoying the work he’s doing now — and maintaining balance at home.
“At this point, I’m not willing to take on a role that would require even more time away. Public service matters and it is a huge honor, but being present for the people I love has always been a priority,” Brennan said.
His choice doesn’t necessarily reflect how Democrats view the district overall — only that the party won’t get the clearest possible signal it might have sent by convincing him to run.
Jon Husted launches first campaign ad
More tea leaf fodder can be found in the creative choices Jon Husted’s team made for the Republican U.S. Senator’s first campaign ad.
The 15-second ad, which launched this week, opens and closes with a banner proclaiming President Donald Trump’s endorsement of Husted. Sandwiched in the middle is an image of the post the president made on his Truth Social platform endorsing Husted last April. The takeaway isn’t subtle: Husted, like other GOP politicians in recent years, thinks he can win by consolidating the Trump vote next year.
Read more from Andrew here, including how the ad contrasts with the approach taken so far by Husted’s Democratic challenger, former Sen. Sherrod Brown.
Mark the calendar
Tuesday, Dec. 9: Ohio Senate holds what should be its final voting session of the year.