by Meghan Homsher, Senior Advisor, Frontline Analytics, and Sheila Horseman, Treasurer/CFO, Swanton Local Schools
Ohio recently enacted the most significant property tax reforms in decades. Among the changes is House Bill (HB) 335, which requires county budget commissions to reset inside millage rates following property updates and reappraisals. Previously, inside millage rates remained unchanged as property values increased, allowing revenue to grow with rising valuations. Under HB 335, however, county budget commissions must reduce inside millage rates so that revenue growth does not exceed the rate of inflation.
Before HB 335, the OhioTax Commissioner established effective annual tax rates while ensuring school districts remained at the statutory 20-mill floor. HB 335 introduced a second step to the process by requiring county budget commissions to reduce inside millage after the Ohio Tax Commissioner calculated the 20-mill floor effective rates. This sequencing created the unintended consequence of allowing some school districts to fall below the 20-mill floor.
A Real World Example: Swanton Local Schools
As Sheila Horseman, Swanton Local School District Treasurer/CFO, updated the district's financial forecast, she recognized that this change could quickly reduce the district's effective millage below 20 mills, significantly affecting both projected revenues and the district's long-term levy strategy.
Rather than simply accepting the results of HB 335 as enacted, Horseman partnered with Superintendent Chris Lake to educate state legislators about the impact on school districts. Superintendent Lake highlighted how the revised rate-setting process could push districts below the 20-mill floor—an issue that had received little attention during the broader property tax reform discussions. Using data and projections, Horseman and Lake demonstrated the practical financial implications for the Swanton Local District. Along with other advocacy from across the state, their collaborative efforts helped bring attention to the issue and contributed to legislative action.
The Correction: HB 479
That action came with HB 479, a corrective bill signed by Governor Mike DeWine in June. The legislation changes the order of the rate-setting process by requiring county budget commissions to complete inside millage adjustments before the Ohio Tax Commissioner establishes effective tax rates. This ensures school districts remain at or above the statutory 20-mill floor while still complying with the broader property tax reforms.
For the Swanton Local District, the change is expected to increase property tax revenue by approximately $80,000 per year. Preserving the 20-mill floor, this change adds both revenue and greater financial stability at a time when the district is carefully contemplating spending cuts. It also provides greater confidence as district leaders consider the future renewal of the district's fixed-sum levy, knowing the effective millage will not be reduced below the statutory floor.
HB 479 also addressed another unintended consequence of H.B. 335. Because H.B. 335 required each county budget commission to independently reduce inside millage rates, taxpayers within the Swanton Local School District could have been subject to different inside millage rates depending on whether they lived in Fulton or Lucas County (assuming 20% growth at each reappraisal/update). The corrective legislation restores consistency by applying the reduction calculated in the district's primary county uniformly across the entire school district.