Group seeks to eliminate Ohio property taxes
By Marty Schladen
Ohio Capital Journal
A group of activists is seeking to amend the Ohio Constitution to ban property taxes. Rankings show Ohio property taxes are relatively high, but policy experts say eliminating property taxes would cause devastating budget cuts across public services.
According to the nonpartisan Tax Foundation, Ohio had the eighth-highest effective property tax rate in 2023 — 1.31%.
The group Ax Ohio Tax is trying to gather the 413,000 signatures of registered voters that it needs to put a tax-elimination amendment on the November ballot.
On its website, the main reason the group gives for wanting to get rid of property taxes is that if they’re delinquent, owners can be foreclosed upon and lose their homes.
“Imagine working your whole life to pay off your home only to lose it because you couldn’t keep up with a government tax bill,” one YouTube video says. “It’s happening right here in Ohio to seniors, veterans, and working families.”
The video also terms such taxes as “yearly ransom” and says “property taxes turn homeowners into tenants of the government.”
The video makes no mention of penalties for nonpayment of other taxes.
If you don’t pay your state income tax, you can face stiff penalties, or even prison if your nonpayment is deemed to be willful. If you don’t pay sales taxes, in most instances you just won’t get your stuff.
In Ohio, property taxes fund a wide variety of local services.
More than three-fifths of property taxes fund public schools, with lesser portions funding fire and police departments, libraries, townships and city and county governments, Policy Matters Ohio reported in January.
And people unambiguously demand those services.
A Public Opinion Strategies poll released this week said that 90% of Ohioans think their local library is important to their community, 87% believed it was worth the taxes that supported it, and 69% could recall a specific time when the library helped them personally.
Since most people wouldn’t want to lose their libraries, schools or fire and EMS departments, other taxes would have to be jacked up if property taxes were eliminated.
The Ohio Society of CPAs last month issued a report gaming out different scenarios.
If a sales tax increase were the sole vehicle to replace property taxes, they’d have to increase from the current 5.75% to between 15% and 18%, the accountants’ group said.
While Ax Ohio Tax raises the spectre of low-income Ohioans losing their homes to foreclosure, massive sales taxes would fall even more heavily on poor Ohioans than property taxes do.
That’s because property taxes are based on value. Meanwhile, the richest Ohioan pays exactly the same sales tax for a garden rake or a lawn sprinkler as someone who makes a fraction as much.
A somewhat less regressive way to replace property taxes would be to raise the state income tax from its current 2.75% flat rate. It would have to be between 11% and 15%, the Ohio Society of CPAs said.
Such changes come with practical risks. Revenue from property taxes is relatively stable, while sales and income tax revenue plummets during a recession — precisely the time when demand on government services increases.
“Combined with the volatility of income and sales taxes during economic downturns, these replacement challenges underscore the difficulty of eliminating property taxes without destabilizing local services, public finances, and Ohio’s broader economic environment,” the accountants’ report said.
In its report, Policy Matters Ohio said that eliminating the Ohio property tax is a terrible idea.
“In short, eliminating the real personal property tax would force devastating cuts to schools, libraries, and other critical public services, or extraordinary increases in other taxes and utility costs,” it said.
“Legislators have good options to provide property-tax relief to Ohioans who need it — while preserving local revenues. A property tax circuit breaker is one such option. Eliminating property taxes should be off the table.”