Local income tax rates would have to be jacked up to double digits, and as high as 27% in one eastern Ohio county, if officials wanted to use them to fully fund existing public services in the event Ohio abolishes property taxes.
That’s according to a study released last week by the Tax Foundation, a nonpartisan think tank in Washington, D.C., that studies tax policy.
The Tax Foundation tackled the subject as several states, including Ohio, consider proposals to either reduce property taxes or repeal them altogether in response to recent spikes in property values. The group decided to look at tax alternatives, since voters presumably would still want adequately funded schools, fire departments and other local services.
In some states, the Tax Foundation considered alternative options such as higher local sales taxes. But for Ohio, the Tax Foundation picked local income taxes as the sole way to make up the $24 billion in property taxes the state collected last year.
The estimates vary by county. But the average is a 13% local income tax, including existing state and municipal taxes, with rates as low as 9.75% in Geauga County and as high as 27% in Harrison County.
“The unavoidable conclusion: every possible replacement option has a host of problems that would render it undesirable to most taxpayers. Doing away with the property tax may be popular. Replacing it won’t be,” the study concludes.
Here is a visualization of what the Tax Foundation found:
Greg Lawson, a policy analyst with the conservative Buckeye Institute, called the study intentionally simplistic. But he said it also illustrates the high-level challenge of abolishing property taxes, which his organization doesn’t support.
“There’s a lot of things we support that would put a lid on property tax rates or reform local government. But getting rid of the tax altogether, I don’t think there’s a realistic way to backfill it,” Lawson said.
Campaign to abolish property taxes still long shot
Whether Ohio may actually abolish property taxes hinges on a citizen activist group’s ability to collect enough valid voter signatures to put the idea up for a statewide vote.
That effort remains far from a sure thing, according to an update from a representative of the Committee to Abolish Property Taxes.
Brian Massie said his group’s goal is to collect 600,000 voter signatures before the June 2026 deadline, which requires 413,487 signatures – including a minimum number from 44 of Ohio’s 88 counties – to get the issue on next November’s ballot.
Massie said he’s the only person who knows how many signatures the committee has collected and has been keeping that number a secret to remind state politicians whom they work for, he said.
But with some prodding, he offered a ballpark figure: It’s fewer than 200,000.
Massie said he has 2,000 volunteers working to gather signatures.
Shortly after an established Republican pollster announced in late August that 61% of Ohioans supported the amendment, a rumor went around Capitol Square that the campaign got a major infusion of cash. Big money would allow them to hire professional help to gather signatures. Massie said one company quoted him a $1 million price tag to do that.
But Massie said he didn’t pay for the poll and still hasn’t gotten any major contributions. A couple of supposed intermediaries to major donors have reached out to him, but Massie concluded they were just “infiltrators” fishing for information about the group’s signature totals.
“We do have a donate button,” he said, referencing the campaign’s website. “No one has stepped up to help us.”
Republican lawmakers have cited the threat of the amendment campaign as a reason they need to pursue a slew of bills that would either immediately cut property taxes or aim to prevent future tax spikes.
But Massie said there’s nothing lawmakers can do to stop the amendment, short of dramatically increasing state spending on education and taking pressure off property owners.
Meanwhile, a couple of leaders with Citizens for Property Tax Reform, one of the grassroots groups that had been collecting signatures, have left the tax abolition campaign to form a splinter group.
Bill Homan and Kyle Kutz said their new group, Homestead Heroes of Ohio, will work on promoting a comprehensive reform plan and raising money for direct tax relief through the sale of branded merchandise.
Homan said he’s developed major concerns about the abolition amendment, which he believes would spur large investment companies to buy up tax-free real estate, limiting options for homeowners.
“That’s a very dangerous aspect of it,” Homan said.
Tax breaks for Porsche ‘condos’?
Among the long list of parties who say their taxes are too high: clients of Horsepower Farms, which calls itself a “storage condominium” for expensive collector cars. The Powell, Ohio, facility’s website includes pictures of fancy sports cars and retro domestic roadsters in a 52-unit facility, which is a community hub for car aficionados.
The owners don’t generate income from the condos. So it’s unfair, they say, that their ownership of the car condos is taxed as commercial property.
Rep. Brian Lorenz, a Republican who represents Powell, a wealthy enclave north of Columbus, has introduced legislation to classify the condos as personal, not commercial, property. That came up for its fourth hearing Wednesday, but it received no vote.
Horsepower Farms and several of its clients testified in support of the bill. In this case, the luxury car owners say their Porsche “condos” are classified by the tax code in an unfair way.
But every tax break for one party shifts the tax burden somewhere else. Reclassifying the car condos would cost Delaware County between $36,000 and $45,000 per year, depending on whether businesses that own the units transfer ownership to individuals, who could claim the better rate.
The bill offers a curious case of how lawmakers, with this much scrutiny on homeowners’ rising tax bills, are willing to approach an arguably unfair taxation rule if the end result is shifting more tax burden onto homeowners.
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