Lawmakers consider new loan system

Counties may be able to give loans to those who can't pay property taxes.
COLUMBUS (AP) -- State lawmakers are considering bills that would set up low-interest loans to help senior citizens and disabled homeowners pay property tax bills that are outstripping their modest incomes.
Before adjourning for the summer, the Ohio House last week unanimously passed a bill that would allow counties to set up loan programs with banks. The county would deposit money with the bank to be used for low-interest loans to qualified homeowners who are 65 and older or disabled, or both, to be repaid when the borrower dies or sells the house.
Ohio already has a homestead exemption that provides property tax relief for about 220,000 senior citizens whose household incomes are $26,200 or less. The proposal uses most of the same definitions and terms but would allow the loans to go to those with incomes of up to $50,000.
Who qualifies?
The loans could help people live longer in their homes without being forced out by tax bills, said the bill's sponsor, Rep. Sally Conway Kilbane, a Cleveland-area Republican.
"Some people just fall behind, then it builds up interest and penalties and it becomes overwhelming," she said. "I think this removes a worry from a lot of people's heads."
Counties would lose the higher-interest investment income from the money put into the fund. Also, some homeowners might be reluctant to participate because the loan puts a property lien on their home even if the home is paid off. For those reasons, the Legislative Service Commission, which analyzes bills for lawmakers, could not predict how many counties or people are likely to participate.
The House vote sends the bill to the Senate, which is considering a more limited loan proposal by Sen. Robert Schuler, a Cincinnati Republican. That plan would be backed by state money. Other than some possible summer sessions, the Legislature is recessed until after the November election.
County treasurers and homeowners alike welcomed the idea.
Cuyahoga County Treasurer Jim Rokakis said some taxpayers say they're choosing between their property tax bill and food or medication.
"I'm flooded every tax period with letters that are just heart-rending," he said.
Ruthene Pearson, 88, retired 30 years ago as a secretary for Columbus Public Schools. She and her husband, Glenn, live on her pension and Social Security, which have increased little while property taxes have doubled in recent years.
"We are living on a 1970s income in a 2006 economy. And when you get behind, you stay behind," she said.
"If it's possible to get some equity at a low interest rate out of our home now, when we can appreciate it, it's better than dying and not getting anything out of it."