Ohio State Representative Jarrod Martin (R) may not have a huge backing in the House having already been asked to resign by the Ohio House GOP caucus after a series of … indiscretions … that occurred in the last year. Martin refused to step down and instead opted to finish a distant third in his Republican primary. But despite his lame-duck status, Martin quietly introduced a piece of legislation that would have a dramatic impact on the process for passing levies at the local level in order to fund services, including schools.
House Bill 502, dropped last week in the shadow of many larger pieces of legislation would, in the words of the legislation, “eliminate the power of taxing authorities to propose a replacement property tax levy.” This change will subsequently force local entities to place “new” levies in front of voters instead of putting replacement levies on the ballot. In a typical Tea Party move that their tax-God, Grover Norquist, would be proud of, any new levy would then be interpreted as the imposition of a new tax instead of the more honest label of a replacement for a levy that is expiring.
So maybe you’re thinking, “Cool, eliminating levies seems like a great idea because we’re all tired of having to vote on them anyway.” Yes, we are all fed up with the process of levies, but in Ohio that IS our method of maintaining sources of funding for all services at the local level (schools, libraries, fire, police, medical, township-level expenses and, in some cases, cemeteries).
And this particular point about asking for “additional” funding is often confused when a levy is placed on the ballot as opponents often mistakenly question why they are having to “shell out more money” when they “just passed” a levy 4-5 years ago.
It’s important to provide some history and definitions for the terms in play here. A 2007 study by the Education Tax Policy Institute (ETPI) did an analysis of school tax levies over ten-year period. We’re not going to reference their findings, but their comprehensive set of definitions are very helpful.
First they explain the state law that is the reason why Ohio constantly has levies on the ballot in every community in Ohio.
Unlike virtually every other state, the millage rate for Ohio’s continuing property tax levies does not typically remain at the voted level. This is because House Bill 920, legislation enacted by the General Assembly in 1976 and codified in the state constitution by amendment in 1980, “rolls back” millage rates in response to inflationary increases in district property wealth resulting from periodic property reappraisal. The erosion of voted millage rates over time in many districts (caused by HB920) is the primary reason that Ohio relies more heavily on local school levies than other states.
In short, HB920 freezes property tax revenues at the dollar amount and at the time that voters approve. Over the years, despite an increase in costs, the precise amount of money approved by voters remains the same. Therefore, whether the levy is expiring or the costs have ballooned beyond the levy’s financial contributions, the local government must ultimately return to voters for passage of another levy.
There are multiple types of property tax levies:
Continuing property tax levies are what most citizens think of as “regular” school levies. They are measured in “mills” (one tenth of a percent), with the millage rate applied to the property wealth in the school district. Once approved, these levies last indefinitely into the future. In order to help counteract the effects of HB920, school districts are allowed to ask voters to approve replacement continuing property tax levies that restore the millage rate to the level originally approved when the levy was first enacted.
Term limited property tax levies work exactly like continuing property tax levies except that they can be approved only for a period of 1-5 years. As is the case with continuing property tax levies, term limited property tax levies are subject to the effects of HB920. An expiring term limited levy can either be replaced or renewed. A replacement term limited property tax levy will restore the millage rate to that initially approved by voters, counteracting to some degree the effects of HB920. A renewal term limited property tax levy will continue the levy at whatever rate is in effect at the time the levy expires.
Emergency property tax levies differ from continuing and term limited property tax levies because these levies ask voters to approve a fixed dollar amount rather than a specific millage amount. Once approved, the millage rate for an emergency levy will fluctuate from year to year based on the total property wealth in the school district. If property wealth increases from one year to the next, then the millage rate will automatically decrease. The provisions of HB920 do not apply to emergency levies. Emergency levies can only be approved for a period from 1-5 years. Upon expiration, emergency levies can be renewed for a period of 1-5 years for the same dollar amount as originally approved.
What Martin wants to specifically eliminate are the replacement property tax levies (continuing and term limited) that allow the voters to restore the millage rate to the level they originally approved when the levy was first enacted. In essence, it allows the voters to hit a “reset” button of sorts to bring the funding from the levy back up to the same relative amount as when they first voted it into place. This is an important option for voters to have when we consider that levies essentially lose value over time. By voting for the replacement levy, everyone can be assured of restoring funding to an amount equal to a previous point in time.
By contrast, and still a frequently utilized option, a renewal levy serves to lengthen the time a levy is in place but at the decreased funding amount as affected by the aforementioned HB920. A continued use of renewal levies over replacement levies would result in a significant decrease of funding over time that could only be augmented by the introduction of “new” levies that are described on the ballot as being “additional” — a term that is misleading when the levy is being requested to replace diminishing and/or expiring revenue due to laws enacted by the state legislature.
HB502 would result in a state-level edict completely eliminating the entire section of law that permits the use of replacement levies by local government entities. In addition to being another case of this body of state legislators attempting to dictate issues of local control, Martin’s bill also plays a dangerous political game centered around locally funded services. To be clear, Jarrod Martin has not proposed a larger solution to the funding of public schools and local services, he is simply removing a crucial option away from local communities around the already confusing process of communication about the approval of levies.
If Jarrod Martin’s proposal passes, then local townships and schools won’t be able to try to simply explain to voters that a levy is being put forth in an effort to “replace” the levy that was passed a few years ago in order restore the funding back to the amount originally approved (which is unreasonably hard to do as it is). Now, instead of replacement levies, local governments will be faced with the task of rolling out “new” levies on the same schedule as these replacement levies. And then the tea party activists will scream bloody murder at the top of their lungs at the “injustice” of being faced with “new” taxes by the government, which those of us on the rational side of the world will know is a complete and utter lie, but for those who do not understand this already complex system of levies and how they are essentially controlled and dictated by state law, they will be predisposed to opposition as the GOP-messaging machine has created a hostile climate toward public service workers and our locally controlled governments who are being handcuffed at every turn through state-level funding cuts that either come directly through the budget or through crafty maneuvers such as this that directly undercut our ability as citizens to run our local communities.
To understand how widely this is used around Ohio, here are total number of replacement levies for the past 3+ years:
2012 (primary only): 38
2011 (all elections): 251
2010 (all elections): 327
2009 (all elections): 301
And so, as a result of Martin’s proposal to eliminate the choice of a township, village, school district, library, county, etc., to propose a properly named replacement levy on the ballot. Instead, they will face a voting public who will be wrongly trying to understand why they are being asked for “additional” money as the ballot language so clearly states.
So what’s the difference between trying to pass a levy labeled additional vs. replacement?
In the November 2011 election there were a total of 206 replacement and 238 additional levies on the ballot across Ohio (all varieties of government entities). While many factors can be said to enter play in the creation of a levy, the final tallies on these issues are frightening:
Replacement: passage rate of 86%
Additional: passage rate of 31%
And remember that these levies will not – can not – go away as they are the method prescribed and restricted by state law to generate revenue for local governments. So when Martin’s change takes effect and forces a misrepresentation of the way these levies are labeled and voters are confused and misled by the language and anti-tax rhetoric, these levies will fail. And when they fail, they will be forced to resurface in each subsequent election resulting in a dramatic increase in the number of levies we see on the ballot in Ohio (because of laws enacted by the state) until the services, such as libraries, police, fire, and schools, will be forced to cease operations due to an intentional act of deception proposed by a lame-duck Representative trying for one last hurrah.