According to state budget documents, property tax collections for 2023 totaled $22.6 billion. State and local income taxes last year totaled $13.8 billion and sales tax $18 billion.
Heidi Fought, executive director of the Ohio Township Association, said her board hasn’t voted on a course of action regarding this ballot initiative yet, but if it passes it will “cripple” townships.
“Township services are provided mainly through property tax levies passed by township residents. If the property tax is eliminated townships would have no revenue sources to provide the quality of life services that 35% of Ohio residents depend on,” she said. “While the concern for the rise in property taxes is valid, the complete elimination of property taxes will without a doubt decimate local government services and schools, primarily in the rural areas of Ohio.”
Backers of the state constitutional amendment are currently collecting petitions to put it on the November ballot.
All local entities get property taxes, cities and schools can collect income tax — townships can collect income tax but only within Joint Economic Development Districts — counties impose sales taxes, none get all three.
Fought said rural reaches of the state don’t have the income or business/retail base to provide much by way of income or sales tax revenues. Those revenue sources wouldn’t help townships, but could somewhat offset the property tax loss for cities, counties, schools and villages providing services to residents.
Ross Twp. is a rural township in the southern portion of Butler County that houses roughly 3,500 people. It will collect about $3 million in property taxes this year and $1.1 million in other revenue like motor vehicle license fees, gas taxes and $150,000 in local government funding from the state, among other sources. That’s 73% of their revenue coming from property taxes.
“I feel the pending effort to eliminate property taxes is irresponsible, dangerous, and extremely misguided,” township Fiscal Officer Julie Joyce-Smith said. “Especially since the group behind the effort has offered no alternative for a revenue source.”
Schools get the lion’s share of property taxes but they also receive federal, state and in some cases income tax funding. Cass Freeland, director of communications for the Ohio Association of School Business Officials, said they echo what Gov. Mike DeWine has said about this effort.
“That would be devastating for schools in Ohio. Property taxes across the state fund more than half of education spending and some districts rely on property taxes for 90% of their funding,” she said. “The state has an obligation to provide a thorough and efficient system of public schools under the Ohio Constitution, eliminating property taxes would require them to look for revenue from other sources.”
Beth Blackmarr, the spokesperson for Citizens for Property Tax Reform — the group backing the ballot measure — told this media outlet previously “it’s going to be either sales tax or income tax or some combination thereof” to replace the current revenue source. She denied services would cease if property taxes were abolished.
“That’s not correct, because there are other mechanisms that can come into play, if you look to the Ohio Revised Code,” she said, adding they have an analyst who has run models in this regard.
“There are a few different ways to fund these things, but legislation is not our job, legislation is (lawmakers’) job. We’re not going to end up with no funding for these things.”
Ohio House Speaker Matt Huffman, R-Lima, said if it comes to fruition, drastic moves will have to be made, such as consolidating the number of schools or local governing bodies.
“There will just have to be a reconfiguring of local government in the state of Ohio,” he said. “It will be really a new world. Ohio has over 6,000 local districts that tax citizens through some method, real estate mostly, income tax and some other taxes and that’s more than any other state.”
Huffman said local entities who receive the funds go to their local legislators begging them to keep the status quo and it has worked. He said the proposed amendment is a sign that the General Assembly needs to demonstrate to taxpayers that they are serious about property tax reform.
“There are legions of local folks who want to make sure this taxing system stays in place. I think all of those folks are going to their legislator and saying if you end this, or you reduce it substantially, or you limit the ability for the taxes to go up, well that’s devastating for us.” he said. “That’s why we often get to the point where everybody’s nodding and saying somebody needs to do something so we introduce these bills.”
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