Unfortunately, the Republican majorities at the Statehouse have yet to show the necessary ambition. That is evident in the steps they already have taken and in the next steps they propose. They appear hopeful they can do just enough to blunt the current citizen initiative to place an issue on the statewide ballot that would abolish property taxes.
That’s right: Wipe them out.
No surprise such a result would be a fiscal disaster, or a ruinous answer to spikes in property taxes stemming from sharp increases in property valuations affecting many parts of the state. The fallout especially would damage schools, counties, townships and other local entities.
In November, lawmakers approved four measures. Among other things, the legislation would limit increases in property taxes to the rate of inflation and empower county budget commissions to roll back tax levies deemed excessive or unnecessary.
Now lawmakers talk about adding such elements as allowing counties to offer payment plans for property taxes and ballot language that makes clear the impact of a levy.
Time and clarity are good. Yet lawmakers would do well to try something else: Look squarely at how the state has arrived as this point. Getting a grip on the source of a problem often serves as the vehicle for arriving at a credible fix.
How did Ohio get here?
A big part of the answer goes to the Republican majorities orchestrating a steady decline in state income tax rates the past two decades. In 2004, Ohio featured a top rate of 7.5%, with multiple lower rates, the whole reflecting the progressive system first enacted in the 1970s. By 2025, the top rate had dropped to 3.125%, with the state adopting a flat rate of 2.75% starting this year.
One glaring consequence has been a marked shift in the burden borne by property taxpayers. They have been tapped to come up with more revenue. A recent analysis by the Ohio Education Policy Institute found the state went from 19th in 2002 in per-capita combined local and state tax revenue to 30th in 2021, landing 12% below the national average.
At the same time, the analysis notes, the burden of state taxes alone declined to the point that Ohio ranked 42nd among the states. And the local property tax burden? It reached the eighth highest in the country.
Add to the mix other changes embraced by the Republican majorities, such as slashing the local government fund, repealing the estate tax and easing the property tax burden on businesses, and it hardly surprises that the share of property taxes paid by farmers and homeowners climbed from 46% in 1975 to 67.5% in 2023.
Meanwhile, the share picked up by businesses fell from 53.9% to 32.5%.
A tax system once in relative balance is now out of whack.
All of this shouts: The state must do its part in a bigger way. Dani Isaacsohn, the Ohio House minority leader, got it right about the property tax reform effort: “Until the state starts paying its fair share of public education, the rest is mostly lip service.”
That means taking such steps as reversing some of the income tax cuts for wealthier Ohioans, or narrowing the $12 billion a year in various state tax exemptions, credits and deductions. Short of that, at least do the fair thing and target property tax relief for those who truly need it, the state covering the cost when the tax exceeds a certain share of a property owner’s income.
Michael Douglas is a retired Beacon Journal editorial page editor. He can be reached at mddouglasmm@gmail.com.
