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Property Tax Break for Ohio Seniors Will Be Restricted by Income for New Applicants

Rita Weaver, a recipient of the Homestead Exemption, at the senior center in Maple Heights. (Nick Castele / ideastream)
Rita Weaver, a recipient of the Homestead Exemption, at the senior center in Maple Heights. (Nick Castele / ideastream)

Since 2007, all Ohioans over the age of 65 who own property have received a tax exemption on 25 thousand dollars of their home value – paid for by the state. On average, people save about $440 a year, according to the Ohio department of taxation. Ohioans with disabilities are also eligible.

For decades after the exemption began, it was subject to an income cap. But Ted Strickland, when he was governor, saw it expanded it to all senior homeowners regardless of income.

He says he did that at a time when the state was bringing down income taxes, and he concluded that many seniors didn’t benefit from those tax cuts as much as he’d like.

“And I felt that if we were doing that this would be a way to make a tax cut available to people who would not specifically benefit from an income tax cut," Strickland said.

In just the first year after the change, the number of people on the program more than tripled, from about 217,000 to 776,000. And it’s grown even more since.

But in this latest budget, the Homestead Exemption is being scaled back. Everyone currently receiving the exemption is grandfathered in – they won’t lose their tax break. But now, new applicants to the program will only be eligible if they make less than $30,000 a year.

Over time, the number of people who qualify will shrink, and the cost of the program to the state will gradually come down.

At the senior center in Maple Heights, 65-year-old Rita Weaver estimates she saves several hundred dollars on her property taxes thanks to the exemption. That helps her pay for regular visits to the doctor. Weaver says she makes more than the new income cap.

“So when I attempted to apply they said it didn’t make any difference about the income. So I was glad about that," Weaver said. "It worked out for me this time. So I am hoping that I am grandfathered in right now.”

And under the new rules, seniors like her will be.

Phyllis Leanza is 91 years old, and has been receiving this tax break for years. She needs every dollar she can save, she says, because she’s seen costs go up.

“Everything, just everything -- the groceries, the bills…your medical, your medicines, just everything, your insurances, just automatically, as each year, they automatically go up," Leanza said. "Our Social Security doesn’t go up that much.”

Lynda Petit is 65 and doesn’t know yet if she’ll qualify under the new rules. But now she finds herself in a hurry to apply before the end of the year, in case she makes above the limit.

“All of a sudden now we’re going to, now that I’m eligible, now we’re going to start counting and looking at income," Petit said. "And I’m like, I am middle class. I don’t have this huge income coming in.”

Republicans in the state legislature inserted this change during the conference committee on the budget. It’s one of the final steps in a budgetary process that cut income taxes and raised the sales tax.

Some Democrats say there wasn’t enough debate on the Homestead measure.

Republican State Representative Jeff McClain acknowledges there wasn’t much. But in defense of the measure, he says it should only be available for those who truly need it.

“There are a lot of folks out there that I have talked to, they make good income still, and they would be eligible for it, but they don’t have a problem with paying for that," McClain said.

Although Republicans made the change, Zach Schiller at left-leaning think tank Policy Matters Ohio says it was a good one – a rare Republican tax decision that Schiller supports. His group has long called for a halt to tax breaks, especially for the wealthy.

“Why would you want to be giving a property tax break to people owning homes worth hundreds and hundreds of thousands dollars, who have no need for it, at a time when the state had any number of needs that it could use the revenue for?” Schiller said.

Schiller says there’s room for debate over whether a $30,000 cap is too low.

But regardless of where the cap is set, he considers the homestead exemption change more benign than another budget provision that eliminates the property tax rollback. That’s an across-the-board state-funded property tax subsidy of 10 to 12.5 percent.

For each increased or new tax levy that’s passed starting in November, everyone will pay the full freight.

Nick Castele was a senior reporter covering politics and government for Ideastream Public Media. He worked as a reporter for Ideastream from 2012-2022.