If grandpa or grandma needs another $441 dollars next year to pay their property tax bill, they have good reason to complain, Democratic officials said Tuesday, vowing to inform more Buckeye seniors about how Gov. Kasich's $62 billion budget may harm them at tax time or when new tax levies are approved.
In a conference call with invited reporters this afternoon, Ed FitzGerald, the all but nominated Democratic candidate for governor next year, said he supports a bill that two Democratic lawmakers are introducing that would make the lives of Ohioans, especially the growing ranks of its seniors, better and more supportive.
As the only Democratic officeholder in Ohio willing to take on Gov. Kasich next year, FitzGerald said that by correcting the "the mistakes and the errors, misjudgments and misplaced priorities" in Kasich's budget signed into law when he approved the state's next two-year budget on the eve of the new fiscal year in June, that included a repeal of the decades-old Homestead Property Exemption for Ohioans 65-years and older, seniors wouldn't be penalized when their working careers are over at a time when they need more not less help..
"This budget would raise taxes on consumers, through an expansion of the state sales tax, and lower them significantly on businesses. It would raise property taxes in the future by doing away with the long-time homestead exemption. Income taxes would be cut by 10 percent, a cut that is a bigger benefit to high wage earners," is how the Cincinnati Enquirer assessed Gov. Kasich's second state budget.
In a media release on the current two-year spending plan, found at Kasich's state Webpage, many reasons are given about how the budget helps Ohio transition for jobs and growth, not one word is seen that talks about the reduction in tax relief for seniors, a fact a couple Democratic lawmakers and one candidate who wants the chance to write a different budget if he's elected.
FitzGerald was joined on the call to invited reporters by State Senator Lou Gentile and Representative Nick Barborak, both Democrats serving in chambers where Republican hold a supermajority of seats.
As a former Mayor of Lakewood and the current Chief Executive Officer for Cuyahoga County, FitzGerald said he's no stranger to balancing budgets, but had he been governor when the last budget arrived at his desk, he would have vetoed provisions that shifted taxation to the middle class and poor through an increase in the sales tax and a repeal of tax relief seniors need in their golden years just to give the wealthiest earners more income tax relief.
"A budget is a statement of priorities and what you really value," FitzGerald said, calling the new tax treatment for seniors the "most regressive taxation" part of the state's $62 billion spending plan. At a time when seniors are trying to stay in their own homes and make ends meet as food and medical costs increase, for Gov. Kasich and Republican legislators to eliminate the Homestead Exemption for future seniors and roll it back for current seniors isn't a very humanitarian policy. Seniors warrant extra and deserved help, and eliminating the guarantee seniors have depended on for decades in order to fund tax cuts on millionaires is another example of a "top down philosophy ... that doesn't work."
FitzGerald, Gentile and Barborak all agreed that with the economy still struggling, especially for seniors, easing their burden after lifetime of hard work should have been part of the budget instead of making their situations more difficult.
What are the real property tax increases Kasich signed off on?
Elimination of 10% rollback: In 1971 the state began paying a portion of homeowners’ property taxes by way of the 10% rollback. The budget eliminates this rollback in an effort to move to a more simplified system in which property owners pay their entire property tax bill, but enjoy reduced income tax rates.
Elimination of 2.5% exemption for owner occupied residential property: Currently there is a 2.5% homestead exemption for residential property owners that are disabled, or at least 65 years old. The proposal recommends placing an income limitation on that exemption.Owners turning 65 with annual income in excess of $30,000 will not be eligible for the exemption under the proposed plan. However, owners that currently qualify for the exemption will not be affected.
Each official said, based on their interactions with constituents, that Ohioans really don't know about this tax change. But once they do, when local officials ask local taxpayers to may more as they will have to do to keep up with the cost of services now that the Kasich Administration has balanced the state budget by withholding funds that used to go to local communities from the Local Government Fund, the won't like it.
"They will be rightfully outraged," FitzGerald said, if the bill gets a hearing date and public testimony is accepted, which it wasn't before when the changes to senior taxes were inserted in the Republican-controlled budget at the eleventh hour earlier this year.
Sen. Gentile said calculations on what the average senior enjoying the Homestead Exemption can expect to lose going forward is about $441 per year in tax relief. "Seniors turning 65 next year should be alarmed they won't be subject to this tax relief," he said, adding that it's "not right for middle income seniors struggling to make incomes meet" should help high earners. He said the homeowner income of $30,000 is too low, and should be raised higher so more middle class seniors can also benefit.
Rep. Barborak called it common sense legislation. He said people are unaware of it and when they do learn about it they're not happy with it. He said it represents a new tax increase on fixed income people who have to contend with the rising costs of food and medicine, and have no way to increase their incomes. That, he said, is a "significant impact on their lives and their priorities form day to day." The current limit, he said, is an arbitrary standard. He also said he's heard nothing but positive comments from people he's spoken with about the bill. He and Gentile hope for a date for a hearing so people can weigh in.
Barborak said he has 11 cosponsors in the House so far including one Republican.
Reporters tried on three occasions to back FitzGerald into a corner, asking him whether he would raise taxes Kasich lowered to previous levels. FitzGerald, whose cool demeanor and phlegmatic style are in stark contrast to Kasich, the governor he wants to beat next year, who increasingly becomes easily irritated and punches reporters when he doesn't like their question, said his policy and priority is to have a "more equitable taxation system in general" and that he would not have signed the budget bill Kasich signed.
"My policy is to have tax relief for those who need it," he said, emphasizing that the "opposite philosophy has been in place over the last years."
In response to a question on why local governments may have problems with the new tax change, Rep. Barborak said they are not ready for means testing, and that local auditors offices have been left to fend for themselves when it comes to implementation. He said there wasn't communication with the state, and that auditors are now "stuck with it," doing they best they can.
He speculated that one reason the legislature didn't have hearings on it was they knew it wouldn't be popular.
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