TOLEDO — Homeowners may like the sound of lower property tax bills, but school and county officials are sounding the alarm that some reforms under consideration in Ohio could have a devastating impact on services.
The dust has yet to settle on several property tax changes that were included in the state’s biennial budget bill. Ohio Gov. Mike DeWine exercised his veto power on the four such provisions in the bill, but the Ohio House of Representatives returned to Columbus for a special session July 21 so Republicans could attempt to override three of those vetoes.
These included:
- A measure that would eliminate local governments, school districts or other entities’ ability to propose replacement or emergency property taxes levies
- A measure that would require certain additional tax levies to be included when calculating the 20-mill floor calculation that the state takes into consideration when distributing school funding
- A measure that would grant county budget commissions the authority to reduce millage of voter-approved levies that the commission believes would lead to unnecessarily excessive revenue
Ultimately, Ohio House Republicans were only able to muster enough votes to override the first proposal in this list, and that move still requires the approval of 60 percent of the Ohio Senate.
The Toledo Public Schools Board of Education sent a letter last month to Rep. Josh Williams, Majority Whip, expressing strong opposition to all three provisions.
“These proposals would significantly erode local control, destabilize school funding, and override the decisions of voters who have historically supported strong public schools in their communities,” board members wrote in a joint statement. “If these provisions are allowed to take effect, districts like ours will face even greater challenges in delivering quality education to every student.”
The TPS Board of Education urged legislators to reject any effort to override these vetoes and instead collaborate with local leaders to protect the financial tools essential to public schools’ success.
The push for property tax reform
Several of the property tax reforms proposed in the state budget bill mirrored those found in House Bill 335, the Property Tax Relief Now Act that was introduced in June.
“Ohio’s property taxpayers are at a tipping point,” Rep. David Thomas (R-Jefferson) said in sponsor testimony for the bill. Rep. Thomas pointed to a stalemate between the legislature and local governments over taking action to address spikes in what he described as “unvoted taxes” over the last five years.
One of the most dramatic changes HB 335 proposes is eliminating inside millage. Under the Ohio Constitution, each municipality is allowed to set this portion of property taxes without voter approval. By law, inside millage cannot exceed 10 mills, and none of the municipalities in Lucas County are at that maximum. A mil is $1 of tax for $1,000 of property value.
The inside millage rate for Lucas County is 2.00 and Toledo City is 2.50. The Lucas County Auditor’s office provides a list comparing local inside millage rates.
Outside millage makes up the other part of property taxes and usually represents the majority of a resident’s tax bill. Voters determine outside millage at the ballot box, and it includes levy support for schools, senior services, Metroparks, libraries and other entities.
Ohio enacted property tax reform in 1976 under House Bill 920 that was meant to keep inflation from increasing voted taxes. This means that when property values increase, outside millage cannot exceed the dollar amount that was originally passed at the ballot box and the effective millage rate goes down.
Inside millage is not regulated by House Bill 920 and does increase at a proportional rate to property values.
In testimony for HB 335, Rep. Thomas said the bill would provide $3.5 billion in direct property tax relief to Ohioans by eliminating the unvoted inside millage property taxes that go to counties, schools, villages and cities.
Representatives from TPS as well as the Lucas County Commissioners expressed alarm about the potential impact of this change in written testimony opposing HB 335.
The commissioners described inside millage as a constitutionally authorized and long-standing component of Ohio’s local government finance structure that has been in place since 1934.
“This revenue is not a luxury. It is a necessity,” the commissioners wrote in their testimony. “It enables us to carry out our legal obligations and provide the public services that our residents expect, rely upon, and are entitled to receive.”
The passage of HB 335 would result in a cut of more than 15 percent to the county’s general fund.

“You’re cutting $20 million from your budget. That’s huge,” Commissioner Lisa Sobecki told the Toledo Free Press. Sweeping cuts would result, spread across all county services including law enforcement, courts, elections, jail facilities and 911 emergency response.
Losing the assurance of inside millage as security could also result in a credit downgrade for the county, increasing borrowing costs for future debt-funded projects.
Ryan Stechschulte, treasurer and chief financial officer for TPS, and TPS Board vice president Chris Varwig also submitted testimony opposing HB 335. Stechschulte wrote that the district would lose $6 million in fiscal year 2026 and $12 million more the following year if the bill passed, requiring immediate and significant cuts. These would include closing schools, a reduction of 180 positions over two years and cuts to student services, intervention programs and extracurriculars.

In addition, the bill’s proposed ban on new emergency and substitute levies — which may pass as part of the state’s budget bill if the legislature’s veto override stands — would prevent TPS from renewing its current emergency levy, according to Stechschulte. He wrote that the district would be forced to place a new levy on the ballot in 2027. If that levy failed, the district would face an additional $15 million in cuts.
“This bill strips away local control, introduces fiscal volatility mid-contract and mid-budget cycle and puts our most vulnerable students at the greatest risk,” Stechschulte wrote. He urged legislators to “take the time to develop a collaborative solution that provides meaningful tax relief while protecting the future of Ohio’s children.”
Finding the right balance
Why the strong push for property tax reform now? Brian Dicken, who serves a vice president for advocacy and strategic initiatives for the Toledo Regional Chamber of Commerce, speculates the movement is partly driven by recent increases residents saw from property reevaluations.
“Property taxes in Ohio are incredibly complicated,” said Dicken. “At the state level, there’s probably close to 20 different pieces of legislation that deal with some aspect of property tax reform.”

In his role, Dicken coordinates interactions with elected officials and leads policy development on behalf of the chamber’s 2,000 members. From a business perspective, Dicken said making sure the tax burden is balanced is always important.
“We understand that if we want to have services like police and fire, we have to pay for that. But we also want to make sure that there’s not an overly burdensome tax structure that makes it difficult for businesses to be successful.”
The business community also takes an interest in entities that serve the greater public good such as schools. A local school system has a big impact on talent attraction and retention and workforce development. “Without a prepared workforce, our community suffers significantly,” Dicken said.
The chamber has not taken a stance on any of the specific reforms under consideration at this point, but Dicken said whatever happens needs to be clear and easy to understand.
“There’s a lot being discussed right now in terms of tax reform across the state,” he noted.
When Gov. DeWine vetoed the property tax provisions in the state budget bill, he announced a task force was to be created to study the property tax reform issue and make recommendations to the General Assembly. The group is expected to include lawmakers, state officials, school and community representatives and property tax experts.
This comes on the heels of a bipartisan legislative task force that extensively studied property tax reform and issued a report with 21 recommendations last year.
“I think the fact that there’s been so many studies shows the complexity around the issue,” said Dicken.
He said local entities need to have time to react and plan if the funding formula changes.
“We’ve got to make sure we’ve got the right balance,” Dicken added. “You don’t want to overtax your communities because that’s not good, but at the same time you’ve got to make sure that those basic needs are met so that way we have a safe, vibrant community. And that’s always the biggest question.”











































