Ohio needs a plan in case property taxes disappear

As we've watched the steady drumbeat of local school districts making cuts, we haven't been able to shake worries about something Ohio Gov. Mike DeWine said a few weeks ago. In discussing what would happen if property taxes were outlawed in Ohio, DeWine warned of what would be needed to replace the lost revenue not just for public schools, but for police and fire departments, townships, parks, libraries, county government and, well, the list goes on and on. "If you did it through a sales tax, it would go up to a 17, 18, 19 percent, 20 percent sales tax in the state of Ohio on products you buy," DeWine said. "So, it would be absolutely devastating." DeWine, a Republican, wasn't just discussing a hypothetical. There is a real chance that property taxes could be abolished through a proposed amendment to the Ohio Constitution. Backers of the idea are gathering signatures with an eye toward getting the issue on the November ballot. The group behind the efforts, the Committee to Abolish Ohio Property Taxes, needs valid signatures from more than 413,000 registered voters to get the measure on the ballot. Given the frustration that surrounds property taxes, which have gone up in many places as property values have climbed, we fear that's an achievable goal. If it makes the ballot, that same frustration could lead to passage, something that should worry everyone in Ohio. The proposed amendment doesn't include a mechanism to replace the roughly $24 billion in property tax revenue that would be lost. Brian Massie, one of the leaders of the Committee to Abolish Ohio Property Taxes, said in August that fixing the problem would be up to the state, the Statehouse News Bureau reported. "We're saying, you don't want to be responsible to the people that elected you, and you want us to solve the problems that you have created?" Massie said. "I don't think so." All of which led to DeWine making his prediction of a higher state sales tax. Additionally, he suggested that the state income tax also might rise. An income tax hike seems less likely than a sales tax increase because Statehouse Republicans have been merrily cutting the state income tax rate for years. Raising the income tax obviously would put a crimp in their long-term goal of eliminating it. In 2023, the state income tax, along with the commercial activity tax, generated about $13 billion. We have yet to see a workable plan for replacing the revenue that would be lost if the income tax disappeared. Lawmakers have passed several changes to how property taxes work in Ohio that are supposed to relieve pressure on property owners, but those changes didn't stay the anti-property tax committee's hand. DeWine and other elected officials need to take the potential elimination of property taxes seriously and do more than issue vague warnings. They need to take concrete steps to decide how the state would address a sudden and massive loss of property tax revenue. Citizen-initiated amendments to the Ohio Constitution that pass take effect 30 days after the election, according to Ohio Secretary of State Frank LaRose's office. That wouldn't leave much time for the legislature to craft a way to replace lost funding for schools and other local entities that depend on property taxes to pay the bills. Uncomfortable as it might be for Republican lawmakers, many of whom are seeking reelection, to discuss tax hikes in an election year, they have little choice. Without a new funding mechanism ready to go if the amendment passes, the cuts that public schools in Amherst, Elyria, Lorain and Vermilion have contemplated or made in recent months will seem like minor inconveniences. Public education in the state would crater, as would a whole host of other government services, including police and fire protection, that residents rely on. The best bet for lawmakers in the coming months is to draft legislation and include a mechanism that triggers the new funding scheme if the proposed amendment passes. If it doesn't, those tax increases wouldn't take effect. Not only would a preemptive plan protect schools and other local governments from devastating funding losses, but it would also tell Ohio voters exactly what they could expect if property taxes evaporated. Ohioans might not like paying property taxes, but we imagine they wouldn't be any happier paying 20 percent in state sales tax on a car, a washing machine, a phone or a pair of socks. (Sales taxes also are regressive, which means they would be felt much more by those who earn the least amount of money.) While some might take whatever plan the legislature comes up with as a threat to get voters to keep property taxes, it would serve voters' best interests by telling them what's coming. Lawmakers need to hope for the best and prepare for the worst.