By CELESTE BAUMGARTNER
Ohio Correspondent

COLUMBUS, Ohio — Citizens 65 or older, as well as those who are disabled, could get some tax relief if Gov. Ted Strickland’s budget proposal to expand the Homestead Property Tax Exemption goes through, said Strickland’s press secretary, Keith Dailey.

“The governor’s proposal does two primary things,” Dailey said. “The homestead exemption is a pre-existing tax release program.

The governor is eliminating the income requirement - currently those who make more than $27,000 per year in income are not eligible to receive the exemption.

“The second thing the expansion entails is moving the current exemption amount, which varies between about $1,100 and $5,700 dollars of value in the person’s home, and taking that to the first $25,000 of market value in the homeowner’s residence which would be exempt from taxation.”

This will provide tax relief to Ohio’s aging population and at the same time will enable the state to take on a greater share of the school funding burden, he said.

“The governor believes this is a crucial tax relief for a segment of the population that very often is on a fixed income and does not typically have school-aged children,” Dailey said.

The property tax reduction will affect about one in four Ohio homeowners. The state will reimburse local schools for that lost revenue from the tax cut. By 2009 the state’s share of education funding will increase from 48-54 percent.

“The state will take on a greater share of funding for schools,” Dailey said.

The extra funding will come from the securement of Ohio’s tobacco revenue, he said. The state receives a yearly allotment of money from the 1998 settlement with tobacco companies.

In this budget the governor proposes to sell those allotments to an investor for a lump sum of money, rather than continue to receive yearly allotments of tobacco proceeds.

“We estimate the state would receive about $5 billion,” Dailey said.
“The governor proposes to devote about $4 billion of that to school facilities commission as well as to pay for future school facility needs and to pay for projects through the purchase of bonds.”

By foregoing the debt associated with bonds - the premium and interest payments - the state stands to save about $257 million per year for the next 20 years and the governor is proposing to dedicate that to property tax relief, Dailey said.