To function, local governments need inside millage

If a Republican state lawmaker has his way, schools, municipalities and even county governments could find themselves facing unnecessary budget crises. A bill introduced by state Rep. Dave Thomas, R-Jefferson, would mostly eliminate inside millage, essentially an unvoted property tax, that all those government entities have long relied upon to fund services. (The only exception would be townships, which would be allowed to continue collecting inside millage.) Sure, impacted local governments could ask voters to approve property taxes to replace the lost funds, but whether tax-weary voters would go along with it is another story. Were voters to reject those property tax requests, local governments would be devastated because of just how reliant they are on inside millage. In 2024, for example, inside millage tax collections added up to nearly $4 billion statewide, according to estimates from the state. That breaks down to more than $853 million for county governments, nearly $2 billion for public schools, nearly $654 million for municipalities and almost $6 million for special taxing districts. (Townships, which, again, would continue to collect inside millage under the bill, took in nearly $458 million.) In Lorain County alone last year, local schools, cities, villages and county government collected about $76.3 million, as our reporter Carissa Woytach detailed in a story we published Saturday. Taking the biggest hit locally would be county government, which received just shy of $19 million last year. Losing so much money on an annual basis obviously would hamstring the county's ability to maintain the same level of services, including at the county Sheriff's Office. As it is, the county commissioners, all Republicans, are worried about a budget shortfall of between $5 million and $7 million next year. Those concerns are among the reasons the commissioners are contemplating putting a 0.25 percent sales-tax increase on the November ballot. That increase, which would generate roughly $14 million annually, would be devoted to funding the county Sheriff's Office. That would free up funds in the county's general fund for spending elsewhere, including, perhaps, replacing the county's deteriorating jail. (The commissioners also have discussed the possibility of putting another sales tax, albeit a temporary one, on the ballot next year to pay for the jail project.) Cities, too, would suffer. For example, Lorain would lose almost $6.2 million, while Avon Lake would lose almost $6.4 million and North Ridgeville would lose a little more than $3.6 million. Smaller communities also would be affected. Oberlin would lose nearly $619,000, Wellington just over $635,000 and LaGrange almost $271,000 In Elyria, the city would suddenly find itself out nearly $5.8 million, funds that even the recently renewed 0.5 percent income tax that voters first approved in 2016 wouldn't make up. That tax is expected to generate between $3.3 million and $3.7 million annually and is earmarked in large part for expenses such as road repairs, police and parks, along with capital improvement projects. Then there's the impact on schools, all of which would lose money. North Ridgeville Schools would be the biggest loser in the county were Thomas' bill to pass, seeing cuts of nearly $9.6 million. Avon Schools would lose a little more than $8.2 million, while Lorain Schools would lose almost $6.2 million. Consider the impact on the two county school districts that managed to pass levies in May. Voters narrowly approved a bond issue to pay for new school buildings and renovations, along with an operating levy, for Avon Lake Schools. Under Thomas' bill, the district stands to lose nearly $6.4 million, more than twice as much as the $3 million the district's just-passed operating levy will generate annually. Clearview Schools' just-renewed levy brings in $353,000 annually, but the district still faces a dire financial outlook that has led to cuts. Losing inside millage would make its outlook even more dire, costing the district a little more than $947,000. As we noted last week when we criticized another Thomas-led bill, which would raise the threshold for approving local taxes from a simple majority to 60 percent, property owners across Ohio are frustrated with rising property taxes. Those increases are driven in large part by increased property values. Bad as Thomas' bills would be, their impact pales in comparison to the damage that would be caused by a proposed amendment to the Ohio Constitution that would outlaw property taxes completely. That proposal, for which supporters are now gathering signatures to place it on the ballot, would eliminate not only inside millage, but property taxes approved by voters to fund schools, cities, libraries, parks, social-service agencies and more. Where would the money to replace lost property tax revenue come from? Given the tax-slashing zeal of the GOP-dominated state legislature, we doubt the state would offer much relief. Perhaps the state would enact a massive sales-tax increase, or perhaps local governments would have to persuade voters to raise income taxes. Voters are unlikely to be keen on either of those options. Property taxes — and taxes in general — are unpopular, but, as we've noted many times before, people tend to like the services they pay for. We don't believe that most Ohioans would welcome watching public services and infrastructure crumble around them. That's exactly what would happen if Thomas' bills became law or voters approved eliminating property taxes entirely.