Episode Transcript
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Speaker 1 (00:00):
People are mad as hell when they got that most
recent tax bill, and people are really demanding answers and
looking for solutions to how to solve the problems so
we don't get whacked like that again. I understand you'd
be talking about this at Thursday evening at the Empower
Youth Seminar.
Speaker 2 (00:14):
Yes, that's correct, and you are absolutely correct. A lot
of anger out there, and particularly with seniors on fixed incomes.
You are right about that.
Speaker 1 (00:24):
So I understand there's a ten member joint committee on
property tax reform you are heading it up. Are you
looking for people to show up to offer their concerns,
problems and solutions, or are you going to be providing
information about potential legislative fixes what's going to take place.
Speaker 2 (00:40):
So I'm happy to go over elements of the report.
And I should qualify this by saying I'm a co
chair Representative Bill Romer, who's the House Ways and Means Chairman,
And I should also clarify the Ways and Means Committee
is the committee that deals with taxes. I chair the
Senate Ways and Means Committee. I think at this point
(01:01):
the focus is going to be more on what we
should be doing going forward and Admittedly, you know, myself
and other members of the General Assembly, we didn't wait
for the report to come out before we started dropping
legislation in attempts to address this, even last General Assembly.
(01:21):
So but I also hope to like clear up some
you know, misconceptions with with what's going on, what we
can and can't do. You know, a good example of
that is, you know, people will say, well, why can't
you just freeze property taxes? And you know a big
issue with that is, well, a lot of these provisions
in the constitutions, so you'd have to go to the
(01:42):
ballot in order to repeal them, if you if that
was something that we were going to do.
Speaker 1 (01:47):
Okay, and my what are the springboards? And this has
to be the Supreme Court case from I guess two
decades ago declaring that the funding of schools was unconstitution
Yet there's been no change that the line's share of
our property taxes is goes to the schools.
Speaker 2 (02:02):
Yeah, so so now you know where I'll be going
in this budget discussion. You're right, in fact, when as
introduced budget passes and there's some nuance to this. But
if that let's say that passes, and is our school
funding formula going forward, the state versus local share split
(02:28):
will be lower than it actually was during d'olf, So,
in other words, that during d'off I think it was
in the low forties, So, in other words, forty percent
of the funding came from the state, sixty from locals.
If this school funding formula goes through, it'll be, I
believe in the load of mid thirties. So obviously we
(02:51):
need to, you know, fix that. And for what it's worth,
the formula that is being phased in, if we fully
phased it in, it is, in my least in my estimation,
a fully constant formula. I think you'd find the school
districts would say the same thing. But yes, you are,
You are absolutely right that that is a huge piece
(03:12):
of this in the sense that if you do more
at the state level, it's not like school districts like
going to the ballot. I think there'd be a lot
less pressure to.
Speaker 1 (03:20):
Do so, okay, so fewer levees, then fewer tax levee
ballot initiatives. Absolutely, well, that's I'm sure that it sounds
like that's going to be welcome for my listening audience,
and of late, most of them get shot down because
people's property tax burden is just you know, it's just
it's too challenging, so they're less likely to vote to
(03:42):
maybe vote for a levee that is actually needed. Some
view them as not unneeded in many cases. But that's
up to our voters to decide. But now, how will
this help in terms of tax relief for the taxpayer?
Since the fundamental issue is here the bottom line, what
do we have to pay in terms of taxes?
Speaker 2 (03:59):
If you're you're looking at fixing the school funding formula,
that would be something that I would say is more
in the future, a fix that would be more future
looking and it's not going to offer immediate relief. But
that said, there are a number of bills in the
General Assembly, some of which I carry, that would offer
(04:21):
immediate relief. I still maintain the three best ideas are
one the property tax circuit breaker to an expanded homestead exemption,
and three a property tax deferral program and some other
states do that. To give you an idea, how that
works is that the state creates a large fund and
(04:45):
you apply, and let's say you're a senior on fixed income,
for example, your property taxes would be free at their
current level, and the state would then take on the
burden as they continue to go up. But then either
when you pass away or sell the home, the state
would then recoup the lost out revenue via a lean
(05:09):
on the property.
Speaker 1 (05:10):
That seems logical. I mean that mechanism at least the
state is not out this money completely, like it's some
sort of government program to just pay for things for people,
but you get the money back when the house is
sold or the estate is disposed.
Speaker 2 (05:23):
That's exactly right, I mean, it was. The basic gist
of it is that if you have a lot of
equity in your home, which a lot of seniors do,
they're able to tap into that early, which I think
the vast majority of them would say, we're totally for that.
Speaker 1 (05:40):
All right. The lean would be established upfront, so they
couldn't so get like a second mortgage and get all
the equity out of the home and leave in debt.
Speaker 2 (05:49):
Correct. And there's a lot of guardrails that would have
to be in place for this. But the state, the
state that did this, well, there's two of them that
did it. One is Maine, the other's Minnesota. The draft
that I have is based on Maine, though I have
not introduced that at this moment because it was well
at the time, there was some talk of which who
(06:11):
who pays for the fund, and you know, my contention was,
let's do this at the state level. There were others
that would say, we'll have this done at the county level.
H it's we're still trying to negotiate that.
Speaker 1 (06:25):
I see. Now you mentioned the circuit breaker. Can you
explain that to my audience.
Speaker 2 (06:31):
Yes, So, the way the circuit breaker operates is people
property taxes are you know, hated by people because they're
not tied in any way to your ability to pay. Right.
So most seniors feel this when they, you know, they
retire and then all of a sudden twenty years later,
(06:51):
their fixed income is eroded, but yet their property taxes
keep rising and they find themselves unable to pay. What
the property tax circuit breaker does is caps the amount
of property taxes that you pay at a percentage of
your income. So, in other words, if you're making fifty
(07:14):
grand a year in retirement, the percentage in the bill
that we introduced is fixed at five percent. If you
go if your property tax burden rises above five percent
of your income, the circuit breaks and then the state
starts taking on the additional burden for that, so you
(07:37):
basically will never pay more property taxes than in theory
you can afford with that. The drawback of it is
excuse me, it's an expensive program. But a colleague of
mind introduced legislation last GA that made this revenue neutral.
We paid for it by going after a number of
(08:01):
what we would consider corporate welfare piesis of statute that
really needed to be reworked in order to provide relief
to seniors in this way. Actually, although that I shouldn't
say that that's relegated to just seniors. This would be
everybody within reason. I mean, there are guardrails. If you
have a two million dollar home and a half a
(08:22):
million dollar salary and retirement, yeah, that the circuit breaker
is not going to apply to you fair enough.
Speaker 1 (08:28):
And then the homestead expansion, just briefly, how does that work.
Speaker 2 (08:34):
So right now the homestead exemption is now there's an
income limit and there's a benefit. So broadly speaking, the
benefit is a dollar amount that comes off your valuation.
So if you have a two hundred thousand dollars home,
homestead exemption is under thirty grand. But now it's adjusted
(08:54):
for inflation. So for ease of example, let's say it's
twenty five grand your home's value at two hundred thousand.
Let's say you qualify, you're a senior over sixty five,
disabled veteran, there's some other widow of a disabled veteran.
You get that twenty five thousand off. So the valuation
of your home for tax purposes goes down to one
(09:18):
hundred and seventy five thousand, and you pay taxes on that.
So it's not a huge benefit. But the caveat is
that you can only get this if your income is
less than about thirty six thousand per year, which really
cuts off the vast majority of Ohioans. Not only that
(09:40):
it was universal at one point, so there are some
folks that make significantly more that are grandfathered in. But
in all cases it's really not the best benefit. So
the idea is with this legislation is to say, look
at this as a percentage of what you're actually taxed.
(10:03):
So if you pay over the course of a year
six thousand in property taxes and you qualify at the
lowest level, you might get twenty percent off your property taxes.
So if you're paying six thousand, you would be getting
a twelve thousand dollars benefit from the state. However, as
your income rises, that percentage drops. It's like a progressively
(10:30):
declining curve, so that you know, by the time you
hit one hundred and some thousand or more, you're not
getting any benefit. But the nice part about this is
is that since it's tied to median income and tied
to percentage of the property taxes that you actually pay,
if you're a senior on fixed income, that you know
(10:51):
you're right at the line towards the top. When you retire,
you actually start walking back up the curve as you're
our fixed income is eroded away, so your benefit actually
grows over time, which I think is a great way
to do this, and I think it would be significantly cheaper,
although we're still trying to find the cost estimate for this.
(11:13):
But again, the homestead exemption only applies to generally speaking,
people over the age of sixty five.
Speaker 1 (11:21):
All right, Well, if you're concerned about your property taxes,
you want to learn a little bit more about this
and more lengthy conversation with Senator Bill Blessing taking place
Thursday night, that's March thirteenth, coming up seven pm. Is
beginning again Martice Thompson on what the eighteen fifty one
center con law is doing. That'll start at seven and
bill will take over at seven thirty for a full hour.
(11:41):
Now I just make pivot over real quick here. You
are one of the bipartisan sponsors are behind the bill
to pay for students to have a free breakfast and
lunch at school. Can you explain your motivations behind this
and how much is it going to cost? I have
to observe, this doesn't sound like a thing usually a
Republican would embrace. So what's the motive? The motive behind this?
(12:02):
And I've had some of my listeners say that out loud.
That's why I'm asking you on their behalf. But in
this as the way the article reads from the Ohio
Capital Journal, this is a free lunch and breakfast for
all students.
Speaker 2 (12:15):
Yes, that's correct. So let me let me step back
for a moment. It's it's the cost of this. So
this is a Senate bill one oh nine for those
who want to research democrat out again per fiscal year.
But I have to add a caveat to that because
there's been some confusion for folks who have reached out
to my office and have said, well, you know, we
(12:38):
pay enough in property taxes for school, we don't want
to pay more property taxes for this. Very briefly, this
will not raise your property taxes. This would be entirely
state funded. And you know, once again, like the property
tax circuit breaker, we had a bill last General Assembly
that made this revenue neutral, so it was already paid for.
(13:03):
But the advocates of this particular program, in light of
the fact that we're in budget season, wanted something introduced
for public inspection, and they wanted it clean, no other
elements in there, which admittedly, the bill that we had
last year that paid for this was what I would
consider sort of a mini budget. But the motivation for
(13:25):
this is simple that when you look at a lot
of the administrative burdened behind doing something like this with
respect to free and reduced lunch, that adds a significant
cost to this, and in the end, it's actually pretty
cheap just to have it universal and and a lot
(13:46):
of the stigma behind this, which is one of the
reasons why we're doing this. But more importantly, I think
that it's also something that I think will reduce truancy
because the income liment for free and reduced lunch aren't
exactly high. There's a lot of lower middle class parents
that would be included in this. Beyond that, when we
(14:10):
talk about tax cuts at the state, at the state level,
and we have a number of people, you know that
that look at a top rate income tax cut and
they're like, well, how does this benefit us? It really
it really doesn't. And we as families pay a significant
amount of money to raise our children. And yes, I
understand that not everybody has children, and.
Speaker 1 (14:32):
You know, but.
Speaker 2 (14:35):
This would be a significant benefit to families, which frankly,
you know, my party, Republican Party, we pay a lot
of lip service to and for parents. I have universally
heard on both sides of the aisle that they liked
this idea because it you know, it's a tax cut
to them, and at the same time, it also absolves
(14:58):
them of a lot of things that are quite difficult
actually as parents. I mean I have three boys myself,
and you know, packing the lunch in the evening for them,
you know, getting them up and getting them breakfast in
the morning, that all would be taken care of at
the school. And it actually achieves an economy of scale
from that standpoint, So it's expensive obviously for parents to
(15:20):
you know, buy school lunches and breakfasts and prepare them
at home. Having this done at the school level I
think would be ultimately cheaper for parents and for the state.
So yes, I do understand that there are people that
disagree with this. They think, you know, this is more
government in their lives. But bear in mind that with
(15:42):
respect to you know, the idea of a common good,
I mean, we do have that in K through twelve
public schools, where you are constitutionally guaranteed a public education
in this state. There's a lot of research about kids
struggling to learn if they're not well fed. This makes
(16:04):
an attempt to bolster our public education system. So in
other words, your education is already free in the sense
at the point of sale. I mean, the state does
pay for it, and so do property taxes. Adding school
lunches to this is in my opinion, the logical next step.
Speaker 1 (16:21):
Okay, I just some people say, well, listen, you know,
folks on life's margins, they had the SNAP program. They're
capable of buying food and preparing lunch. You know, my
mom will always packed me a lunch, and she got
to select what we ate. The food offerings at school
weren't exactly the best when I was going to school,
And I'm not sure what sort of nutritional guidelines you're
going to have on this, but i'd like to think
if you're going to be providing a free lunch to everybody,
(16:42):
at least it will be subject to maybe some sort
of RFK junior type quality of foods as opposed to
the stuff that we're normally accustomed to in a school
lunch line.
Speaker 2 (16:54):
Yeah, there are rules to it now. They're supposed to
be somewhat healthy. Don't have the details on the top
of my head on that, but you know, certainly we
can make that more strict at the state level if
we need to. But even then, in the end, having
a kid fed is in my opinion, better than having
(17:16):
them not fed and trying to sit through class just
thinking about one and only thing, which is I need
to eat. But you're right, I don't. I mean, I
for what it's worth, I think there would be a
lot of local outcry if if the schools school districts,
for example, decided that, you know, we're just going to
serve donuts in the morning because that's cheap processed food.
(17:39):
I just you know, to the extent that we need
to at guardrails, that's fine, but I just I struggle
to believe that they would go ahead and do that.
And oh there's real real quick. One thing I did
forget to say about this. This isn't just public schools.
This would also be you know, chartered on public So
your Catholic schools would be would be receiving this as.
Speaker 1 (18:01):
Well, all right, but not not homeschools.
Speaker 2 (18:05):
No, no, no, no, no, no right, that's correct, and
you would you would want some sort of physical presence. Yeah,
that's right.
Speaker 1 (18:14):
Senator Bill Blessing. Do you have widespread support for this?
Is this a sure thing that's going to go through
or is there going to be some pushback from.
Speaker 2 (18:22):
Oh there's pushback, so from at the legislative level. That's
where I've gotten the most pushback. So the governor has
said that he supports this, but says we we can't
afford it, which I challenge him on that because we
you know, in the budget we do have that five
(18:43):
thousand dollars childcare tax credit piece. There's you know a
number of other provisions that he's trying to do for
families that probably have similar costs. Just the choice of
what we want to do. The bigger concern is uh,
Speaker Matt Huffman, who I don't believe that he wants
(19:04):
to do it. He made he made the argument that, well,
you know, they get these free breakfasts and lunches, they
may not want them. The kids are just going to
throw them away, and that's going to lead to a
lot of food waste. And I kind of chuckled, Well,
you know, you can't. You can you can lead a
horse to water, you can't make them drink. I remember
(19:25):
in grade school myself a number of times that I
had a PB and J sandwich that turned into I
guess a PB and J crepe Yuh. It was all
smashed up and I would end up throwing it away
because I'm not eating that. But you know, at least
being paid to make the attempt, I think is worth it.
And frankly, I'm sure there's a lot of food waste
(19:45):
that you know, their parents have all the good intentions
of giving them, you know, green beans, I think was
the example that Speaker Huffman used. Uh, yeah, the kids
see that and there there. You know, you'd hope that
they would eat it, but chances are they may not.
Speaker 1 (20:00):
Oh that's why I suggested maybe healthy food options only
in the free school lunch and they either you either
eat it or you don't. You know, there's got to
be some tough love in the room if we're looking
out for our children's self. We do have a massive
obesity crisis in this country. Senator Bill Blessing, thank you
so much for spending time with my listeners of me today.
Look forward to the Empower You Seminar again Thursday, beginning
(20:21):
at seven pm. Empower Youamerica dot org. Register and either
attend live or log in from the comfort of your
own home. Thanks for spending the time with us today,
Senator Blessing
Speaker 2 (20:32):
Yeah, thank you, Brian, have a good one you too,