Ohio lawmakers finally reached an agreement on a two-year state budget July 17, two-and-a-half weeks after the June 30 deadline, which includes the creation of a number of new programs and important investments in Ohio’s future.
One important change will be the availability of non-refundable income tax credits for Ohioans to help eliminate lead hazards in homes built before 1978. $5 million per year ($10 million over the next two years) will be available for property owners to claim. Credits are limited to a maximum $10,000 per taxpayer (if the cost of eliminating lead from a property is $6,000, then an individual can claim a credit for that amount; if the cost of eliminating lead from a property is $12,000, then an individual can claim the max amount of $10,000).
Another new income tax credit created in the budget will be available for individuals who invest in an area designated as an Opportunity Zone. Opportunity Zones were established out of the federal Tax Cuts and Jobs Act in December 2017 as a way to spur investment in low-income census tracts – many of which have not seen significant investment following the Great Recession recovery. In total, Ohio has 320 designated census tracts in 73 counties throughout the state. These census tracts will be designated Opportunity Zones until December 31, 2028. A mapping for Ohio’s designated Opportunity Zones can be found on ODSA’s website.
The budget provides a 10 per cent income tax credit of up-to $1 million for individuals what invest in an opportunity zone. The state has set-aside $50 million per year ($100 million over the next two years) for these tax credits.
In the funding department, lawmakers approved the first increase in funding for the Ohio Housing Trust Fund in 16 years, approving an additional $2.5 to $3 million per year for affordable housing and homelessness programs. While this is less than the initially sought $8 million increase in funding that was requested of House and Senate members, the increase will go a long way towards supporting the Homeless Crisis Response Program, the Housing Development Assistance Program, and supportive housing programs. The boost in funding will be provided by an increase in county recording fees, which will increase by $6 to $34 per page.
One policy change that was incorporated into the budget but will ultimately be vetoed by Governor DeWine was a provision which would treat property owned by residential housing developers differently than other property by freezing the taxes for up to three years, or until the sexennial reappraisal is completed, or until construction begins, or the property is sold. Greater Ohio advocated against the inclusion of this provision because we were concerned this change in law would incentivize urban and suburban sprawl at a time when we should instead be supporting infill and density development. We are grateful that Governor DeWine did issue one of this 25 vetoes in the budget to disallow this language which will not become law as part of the overall budget.
It is still possible for such a bill to become law later on as similar legislation, House Bill 149, is still pending in the House Economic and Workforce Development Committee. To date, that bill has only received two hearings, with no opportunity for opponents to offer testimony. Governor DeWine’s veto will allow more opportunity for all sides to express their position on this proposal through full, thorough and complete legislative hearings.
Be sure to check out Greater Ohio’s legislative bill tracker for the latest updates on this and other bills that are progressing through the Ohio General Assembly.