Ohio land banks could claim more tax delinquency cash

In Ohio, county land banks could soon have a larger and steadier source of money to deal with abandoned property. The proposal would let counties direct part of delinquent-tax collections, along with certain fees and penalties, into land-bank funds. That matters because land banks are often the ones left holding the cost of cleanup when a house or lot has fallen too far behind on taxes and too far into neglect.

County land reutilization corporations, usually called land banks, are the local entities that step in when a property has become a problem for a neighborhood and for the tax rolls. They can hold title, maintain the parcel, clear away legal issues and work toward reuse. The bill is built around that reality. If counties want land banks to keep dealing with distressed property, the proposal gives them more ways to pay for the work.

A bigger share for delinquent collections

The central funding change would let a board of county commissioners, after a request from the county treasurer, a county commissioner or the land bank itself, set aside an additional amount of delinquent collections for the land-bank fund. The amount could not exceed five percent of collections of delinquent real property, personal property, and manufactured and mobile home taxes and assessments.

That is a meaningful shift for counties with a long list of neglected properties. Delinquent taxes are usually a sign that a parcel has already been hard to collect from. The bill does not treat that money as a general county windfall. Instead, it channels a portion of it back toward the local entity doing the work of stabilizing or clearing the property.

In plain terms, the idea is to connect the cleanup money to the cleanup task. Land banks spend money on things that do not always look dramatic from the outside, but are expensive all the same. They may have to secure a building, mow a lot, carry insurance, pay for demolition or wait for the right buyer. The new funding stream is meant to help cover that carrying cost.

The cap keeps the tool contained

The proposal does put a ceiling on the new spending. Even with the added authority, the combined amount spent each year in a county could not exceed five million dollars. That limit keeps the program aimed at local problem properties instead of turning it into an open-ended source of general revenue.

The cap also says something about how the bill sees land banks. These entities are not meant to replace a county budget. They are meant to handle a narrow but stubborn problem, parcels that sit empty, drag down nearby blocks and keep generating administrative work. By tying the money to a ceiling, the bill tries to make sure the new dollars stay close to that mission.

For counties with only a small backlog, the cap may never matter much. For counties with a bigger pile of distressed property, it could still provide real help without swallowing other needs. The balance is important because the bill is trying to create a practical tool, not a broad new spending program.

Fees and penalties would feed the same fund

The proposal would also route more money into the county land reutilization corporation fund from the property-transfer process. Fees charged on a transfer of real property to a land bank would be credited to that fund. Penalties and interest tied to current-year unpaid taxes and current-year delinquent taxes advanced to the fund would also be credited there as the money is collected.