Ohio Governor Mike DeWine says the property tax ban could force a tax increase
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The proposition that abolish the property tax in the state of Ohio may result in an increase in other types of taxes to make up for lost revenue if voters approve this measure, the governor of the state warned.
Gov. Mike DeWine, a Republican, spoke at a conference earlier this month and said that if the proposed constitutional amendment to prevent the estate tax reaches the ballot and is approved by voters, the state government may be forced to raise the sales tax to compensate for the impact on the state budget.
The property tax initiative is currently in the signature-gathering phase, which will require certification before it can officially go on the ballot this fall, and advocates are looking to end the property tax as a way to help homeowners.
Ohio Governor Mike DeWine warned that eliminating the property tax would have a significant impact on state finances. (Jason Mowry/Getty Images)
“Sales tax can go up to 17, 18, 19, 20%, sales tax in the state of Ohio on the products you buy,” DeWine said, according to a report by Cleveland.com. “So, it can be very difficult.”
DeWine added that In Ohio lawmakers may have to consider raising other taxes, such as state income taxes, to cover the estimated $24 billion budget hole that would result from eliminating the property tax.
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The Ohio state Office of Management and Budget approved a memo earlier this month that analyzed a proposed constitutional amendment to eliminate and prohibit the estate tax, noting that the $24 billion in annual tax receipts “is equal to the total revenue from Ohio state income and sales taxes combined.”
“Eliminating the property tax would immediately devastate local budgets and force deep cuts to essential services, reducing or eliminating funding for local law enforcement, first responders, and schools, delay. road and infrastructure corrections, and scary services for the elderly and people with disabilities,” the memo said.
Ohio’s budget office noted that about three-fifths of property taxes go to support local school districts. If the property tax were repealed, it would cause thousands of layoffs, leading to larger class sizes and school closings and program cuts.
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Ohio’s property tax revenue totals $24 billion, which is equal to the combined revenue from sales and income taxes. (Stock)
Police, fire and EMS services are all heavily dependent on property tax revenue, and eliminating those funding sources could result in station closings — especially in smaller communities — as well as reduced staffing and slower response times, the memo explained.
Libraries, parks, health and human services and senior support services could also face cuts or eliminations that could impact the community’s quality of life. In particular, programs related to the elderly, health, recovery and developmental disabilities, the loss of funding could increase the strain on hospitals and state programs.
The Ohio budget office memo noted that the state already offers some property tax relief through the housing exemption for seniors and disabled residents, as well as the tax credit for residential homeowners.
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Ohio currently does not levy food on sales taxes, which could change if property taxes are eliminated. (Hollie Adams/Bloomberg)
It also discussed the problems of replacing $24 billion in property tax revenue, noting that the nonpartisan Tax Foundation has evaluated that. income tax rates would need to quadruple or more to 11% to 15% statewide to replace the property tax.
Ohio currently has a state income tax of 2.75% for the current tax year, which is the second lowest rate of any state in the country. The personal income tax would generate $10.5 billion in revenue by fiscal year 2025.
The budget office has negotiated with the Ohio Department of Revenue about swapping property and land taxes sales tax revenue and estimates it will require sales tax rates closer to 15% to 18% – a rate that would be much higher than other states.
A lower sales tax rate would cover the lost property tax revenue, although it would involve increase the sales tax applying for currently exempt items including food and health care, among other goods and services. Those changes would require legislation and, in some cases, constitutional changes, the budget office found.
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Ohio currently has a sales tax of 5.75%, which is close to the national average for combined state and local sales tax rates. The sales tax generated $14 billion in fiscal year 2025.
