State Rep. David Thomas said a bill he introduced to give county budget commissions control over tax rates and levies is “significant legislation” that “strengthens the financial oversight” over taxing entities.

Each county has a budget commission — consisting of the county auditor, treasurer and prosecutor — that is supposed to review budgets and levies for each taxing entity, which includes school districts, cities, townships, villages, libraries, park districts and various county boards that collect money through levies.

The bill sponsored by Thomas, R-Jefferson, whose district includes parts of Trumbull County, would give budget commissions the authority to reduce or eliminate the amounts collected through levies, including those approved by voters.

“If the taxing entity doesn’t need the full levy, then they shouldn’t get it,” he said.

As an example, if there is a county children’s services board with a $5 million cash surplus and a $1 million annual operating cost that collects $1.5 million annually from a levy, the commission would be able to reduce or even eliminate that levy if this bill is passed, Thomas said.

Also, if voters approved a levy on a May ballot, the commission would be able to terminate the levy as soon as a little over a year after it was approved if it was determined it’s not needed, he said.

“In between elections, the voters need a voice and an oversight body to ensure their tax rate is as low as possible,” Thomas said.

Thomas, a former Ashtabula County auditor, said that he reduced a number of tax levy collection amounts in his prior job. But there is “legal ambiguity” for budget commissions that this bill would eliminate, he said.

“The budget commission should be the true watchdog for the taxpayer,” said Thomas, who added the board currently acts “as a rubber stamp.”

HEARING

Thomas introduced the bill Friday and it had its first hearing Wednesday in the House Ways and Means Committee. Thomas serves as that committee’s vice chairman.

“I made this bill bold and gave strong authority to the financial leadership of each county to keep this problem of unvoted spikes and rising taxes in check at the local level,” Thomas said.

That includes the 20-mill floor for school districts. The state Legislature in 1977 approved the bill that guarantees each of the 611 school districts in Ohio receive at least 20 mills even though about 400 of the districts are below that guaranteed amount.

That permits schools below that 20-mill floor to collect the full 20 mills.

It also includes the inside millage, which is the property tax levy for local government entities that is not subject to voter approval and limited to 10 mills.

“We wouldn’t have had the spikes in taxes and huge carryovers if this bill was already in place,” Thomas said.

The bill proposes to give the budget commission control over all property tax levies and permit it to suspend, reduce and question their need; require a public hearing should an entity have a carryover of more than 30% the prior year’s expenses; grant the ability of the commission to review all forms of health departments for need of revenue; remove the veto ability of a county’s largest city on the allocation of Local Government Funds; have library levies determined by county commissioners; and have the budget commission provide a recommendation to the county commissioners before levying agencies receive a vote on new or existing levy action by commissioners.

Thomas said he met with leaders from 45 different taxing associations last week before introducing the bill for feedback.

“Obviously, they’re not happy, but we cannot afford to do bad things anymore,” he said. “The response is negative, but most understand the concerns of taxpayers.”

Thomas said his colleagues in the Republican-controlled Legislature support the proposal, which is why the committee hearing was fast-tracked.

“This bill allows for a full check on local taxing authorities and provides the ability to prevent spikes in unvoted increases, lower tax rates and even curb unnecessary spending,” Thomas said.

Thomas said when he was Ashtabula County auditor, he spent his Julys reviewing budgets and tax levies of the county’s 64 taxing entities.

Thomas, who started serving in the Ohio House in January, has been the Republican majority’s point person on tax reform, sponsoring nearly 10 bills on the issue.

LOCAL REACTIONS

Mahoning County Auditor Ralph Meacham and Martha Yoder, his counterpart in Trumbull County, said they support Thomas’ budget commission bill.

Meacham, who has expressed concern about the 20-mill floor issue for years, said the bill would provide the budget commission with much-needed authority.

“I support the passage of this,” he said. “We’re being responsible to taxpayers. Unvoted levies and inside millage would be the main taxes to look at. The budget commission doesn’t have very much authority right now. This would be in the best interests of the taxpayers.”

Yoder said she prefers this bill to the Ohio House budget bill that limits entities from having more than 30% carryover from the previous year because this provides a way for those entities to explain why they are over that percentage.

“Overall, I like the bill,” Yoder said. “It gives the commission more discretion and more authority and there is more local control. When I look at it, it’s more fair to the local entities. Property taxes need to be fixed. If we can get these reforms correct, we can resolve issues.”