Strickland finds tax reduction for senior citizens an easy sell

4/25/2007
BY JOSHUA BOAK
BLADE POLITICS WRITER
Gov. Ted Strickland greets Elizabeth Smith and her daughter-in-law, Toni Smith, at the Mayores Senior Center, where he talked about his proposed tax cut for seniors yesterday.
Gov. Ted Strickland greets Elizabeth Smith and her daughter-in-law, Toni Smith, at the Mayores Senior Center, where he talked about his proposed tax cut for seniors yesterday.

Ohio senior citizens can thank Joe Camel and the Marlboro Man for Gov. Ted Strickland's proposed property tax cut.

The governor came to Toledo yesterday to promote the relatively uncontroversial part of his budget plan, which would exempt $25,000 from the market value of property owned by senior and disabled homeowners.

That change to Ohio's existing exemption would increase the recipients of homestead tax relief to 775,000 from 220,000.

Savings generated by securing the state's 1998 settlement with tobacco companies would cover the roughly $257 million in annual tax revenue lost by school districts because of the broadened exemption.

"It's something that I am prepared to fight for because we have seniors being squeezed," Mr. Strickland said.

"Prescription drug costs are going up. Food costs are going up. Energy costs are going up," he said.

Mr. Strickland has toured a dozen locations since April 10 on behalf of the battle, but so far the Democratic governor faces little resistance.

Ohio House Speaker Jon Husted (R., Kettering) has yet to announce his stance on the amended exemption. The speaker will arrive at a formal position this week after consulting with the Republican caucus, his spokesman, Karen Tabor, said.

Judy Alexander greets Gov. Ted Strickland, whose proposal to expand the homestead tax exemption, cutting senior citizens' property taxes, is included in his budget plan.
Judy Alexander greets Gov. Ted Strickland, whose proposal to expand the homestead tax exemption, cutting senior citizens' property taxes, is included in his budget plan.

Under the proposal, an average senior citizen living in a $68,000 house in the Toledo Public School District would pay $674 in property taxes, a 36.8 percent discount.

A typical Ottawa Hills senior citizen in a $239,000 house would have a $4,868 tax bill, a 10.5 percent discount.

In a $52 billion biennial budget, tax cuts are popular among a legislative majority with a small-government philosophy.

The Buckeye Institute - a think tank where failed Republican gubernatorial candidate Ken Blackwell holds a fellowship - has minimal objections.

"I begrudge no one their tax cuts," said David Hansen, Buckeye Institute president. "It's a smart political move, but not really smart policywise if you're thinking about Ohio's long-term future."

By securitizing tobacco settlement payments, the state would get about $5 billion.

That lump sum would temporarily replace the bonds that state government historically has used to finance capital projects, such as the construction of schools.

Mr. Strickland predicts the government would save enough money in debt service to make the property tax exemptions possible for 20 years.

The primary concern of Mr. Hansen is that the state might approve additional bonds anyway, thus creating the potential for the government to assume more debt.

An audience of more than 100, including Toledo Mayor Carty Finkbeiner and state Reps. Matt Szollosi (D., Oregon) and Peter Ujvagi (D., Toledo), at the Mayores Senior Center in South Toledo applauded the governor's proposal.

Even the skeptics disappointed by past promises were optimistic.

Gene Hoffman, 66, believes a winning election can turn an honest man into a crook. The retired factory worker hankers for the revised exemption to become law.

"I want to find out if that's actually going to happen because that would save ... money," he said.

Contact Joshua Boak at:

jboak@theblade.com

or 419-724-6728.