Testimony

HOUSE WAYS AND MEANS COMMITTEE | OPPONENT TESTIMONY ON HOUSE BILL 335

Keary McCarthy, Executive Director
June 18, 2025

Chair Roemer, Vice Chair Thomas, Ranking Member Troy, and members of the Ohio House Ways & Means Committee, thank you for the opportunity to testify in opposition to House Bill 335 today on behalf of our bipartisan coalition of mayors in Ohio’s largest cities and suburbs.

Eliminating Inside Millage Would be Catastrophic

We have grave concerns regarding the potential impacts of enacting House Bill 335. While we understand the urgency to address rising property taxes, we want to share the potentially catastrophic impacts of eliminating over $3 billion in inside millage revenue for Ohio’s schools, local law enforcement, and other essential services provided by local communities.

In 2011, the state Local Government Fund (LGF) was reduced by half, costing local communities approximately $300 to $400 million in lost revenue each year. Under HB 335, Ohio’s municipalities could lose over $650 million, counties could lose over $850 million, and Ohio’s schools could lose $1.9 billion each year, according to the Ohio Legislative Service Commission. The potential for lost revenue of this scale to Ohio’s schools and local communities is staggering compared to the previous LGF cuts, and would have profound impacts on essential services in communities across Ohio.

Inside millage funds are the foundation of local government, helping fund critical infrastructure such as fire and police services, EMS, and school districts. In the Ohio Mayors Alliance alone, over fifteen cities would lose direct funding for their police and fire pension fund contributions—critically weakening public safety at the local level. In fact, the vast majority of cities within the coalition that utilize inside millage allocate those funds to their General Revenue Fund. This allows cities to direct the money toward necessary services—many of which support public safety. As we have shared before, public safety can account for as much as two-thirds of municipal General Revenue Fund expenditures.

For example:

• The City of Findlay receives 3.2 mills, all of which are inside millage. These mills will generate over $3 million in 2025, and combined with Findlay’s 1% municipal income tax – the lowest income tax of any city that has an income tax – make up 72% of the city’s total general fund revenue. The city’s base property tax revenue allows the city to invest in public safety, economic development projects, and infrastructure, while minimizing the need for voted outside millage.

• The City of Parma uses inside millage to fund its Ohio Police and Fire Pension Fund contribution and its general fund. Cuts to the city’s inside millage would severely impact public safety, potentially forcing the city to play damage control with its police and fire departments.

• The City of Beavercreek, which is the largest city in Ohio with no municipal income tax, receives about 2⁄3 of its total revenue from property taxes. Moreover, Beavercreek has struggled in recent years to pass levies to support its police department and road repairs. Relying on constant levy approvals, no matter how much residents agree that services are necessary, puts crucial local services in ongoing peril.

If HB 335 eliminates inside millage, local governments will face the prospect of reducing costs or raising revenue through other means. This could result in hundreds, if not thousands, of additional property tax levy requests in communities across Ohio. It would also exacerbate the confusion, frustration, and levy fatigue for Ohio voters. This is not practical, nor would it alleviate the concerns Ohioans have regarding increasing property valuation and rising property tax costs.

Just as the state relies on consistent, reliable sources of revenue to ensure that its obligations are funded each year, cities must be able to plan ahead to ensure that our infrastructure remains safe, our economies continue to benefit businesses and families, and our local first responders have the wages, benefits, equipment, and training we all agree that they need to do their jobs safely and keep our communities safe.

County Budget Commissions Provisions Would Exacerbate the Harms Caused by HB 335

We want to reiterate our prior testimony in opposition to HB 309, as the county budget commission provisions of that bill are duplicated in HB 335. In combination with provisions in HB 335 eliminating inside millage, these provisions would introduce additional instability and uncertainty to local government budgeting and spending, exacerbating the potentially catastrophic impact on local government services Ohioans universally support like public safety, schools, and the construction and maintenance of safe and reliable infrastructure.

Conclusion

We recognize the need to be solution-oriented, and we would welcome the opportunity to work together with you on ways to provide both short-term relief and long-term property tax reform. We hope that you will consider bringing us and the many other impacted stakeholders to the table to discuss solutions and provide feedback on potential reform options before moving HB 335 or any other property tax or local revenue legislation. We can find a better way, and we hope to work together on solutions that address the concerns of Ohioans while not jeopardizing the essential public services.