Tangible Personal Property Tax Replacement Payments

A district’s tax base was reduced by a state decision and replaced with a state payment. The immediate effect was neutral by construction. The structural effect was not. What had been a locally-levied tax — subject to the district’s own voted millage, growing or shrinking with local industrial activity, and beyond the reach of the state budget — became an appropriation whose continuation depends on each biennium. inference The replacement payments were designed to phase down, and the schedule has been revised more than once. verified

The exposure is concentrated. Districts with large industrial or utility tangible personal property bases lost far more of their tax base than districts without, and are correspondingly more exposed to each revision of the phase-down. inference Which districts those are, and what the payments are worth to them now, is not established here. open

What this repository computed # ↑ Contents

Not what Ohio publishes. Figures derived here from committed fixtures, each one citing the test that reproduces it.

The phase-down has been contested three times, and every time the protection was vetoed # ↑ Contents

“The schedule has been revised more than once” is true and understates what happened. Three times the General Assembly wrote a protection against these losses into a budget act and the Governor struck it out. Not once did one survive. verified the greenbooks, committed at lsc-education-greenbooks.txt

• H.B. 1 — the largest, and the earliest. The act as passed would have reimbursed districts in full in perpetuity rather than phasing the payments down from FY2012 to FY2018. The Governor kept full reimbursement through FY2013 and vetoed the rest, so the phase-down resumed on its original schedule from FY2014. The legislature voted to end the phase-down altogether and got a two-year delay instead.
• H.B. 64 appropriated $78.3 million for a second year of the TPP supplement in FY2017, with the supporting formula calculations and a $12 million annual GRF cash transfer into the School District TPP Supplement Fund. All of it vetoed; FY2016’s supplement stood and FY2017’s did not. The same act’s veto also removed an exemption from the phase-out for districts containing a nuclear power plant where replacement payments were 10% or more of total resources — which would have reached Perry Local in Lake County and Benton-Carroll-Salem in Ottawa County, and no one else.
• H.B. 49 capped a district’s fixed-rate TPP reimbursement loss, including loss of the supplement, at 3.5% of total resources in FY2018, extended the cap to JVSDs, and slowed the phase-down to one-fourth of one mill of average valuation from FY2020. Vetoed entire.

Why none of this is visible in any series here # ↑ Contents

A vetoed appropriation is never appropriated, so it appears in no enacted total, no actual, and no line item — the whole apparatus of this repository reads documents that record what happened. The $78.3 million that did not reach districts in FY2017 is not a hole in the data; it is a quantity that has no place in the data at all. The only committed source in which it exists is LSC’s analysis of the act that contained it. verified

That is the argument for reading acts rather than only the money they moved, and this stream is where it pays best: the phase-down is the thing being fought over, and the record of the fight is entirely in provisions that never took effect. inference

It also changes what the phase-down is. Read from the enacted figures alone it looks like settled policy revised at the margin. Read with the vetoes it is a policy the General Assembly tried to stop in 2009, tried to cushion in 2015, and tried to cap in 2017, and which survived each time by one signature. inference