Ohio’s Republican lawmakers should follow Gov. Mike DeWine’s lead and scrap their property tax refund gimmicks that could lead to chaos in our public school districts.
As part of the two-year state budget, DeWine line-item vetoed a plan to require taxpayer refunds if a school district’s cash reserves total more than 40% of its current operating expenses. The governor also wisely rejected other technical changes to property tax millage and tax levy options.
That’s good news for Ohio’s public school students, although lawmakers can still override DeWine’s actions with a three-fifths majority, which is quite possible with Republican supermajorities in the House and Senate.
Here’s why we believe DeWine was correct.
Refunds would force more levy battles
The concept of returning billions to taxpayers might sound good on a reelection flyer, but it’s fraught with potential problems that could hurt our children.
Lawmakers want to issue property tax refunds in any school district where its year-end cash balance is more than 40% of its annual budget. Districts could earmark some “excess” funds for special projects or maintenance planned within three years.
And while it’s true many districts have seemingly large cash reserves, it’s unlikely they are hoarding cash. It’s more likely that lawmakers would be arbitrarily punishing sound financial management and illegally ignoring the will of local voters.
For example, Buckeye Local Schools in Medina at the end of last year was carrying over $33 million in reserves, about 133% of its $25 million budget. But the district previously went almost two decades, between 1994-2012, without passing a levy.
The superintendent of Medina City Schools and others have been outspoken in their concerns about forced refunds, noting that districts receive an infusion of revenue when levies are first approved. As expenses rise with local levy funds mostly capped, deficit spending becomes necessary until a new levy is approved to restart the cycle.
Mandating refunds when districts are trying to manage their resources and avoid new levies for as long as possible is poor public policy.
The levy cycle is one we’ve repeatedly seen in Ohio districts for generations, often leading to teacher layoffs. Districts like Reynoldsburg, just east of Columbus, had a 56.5% savings ratio a year ago but lost a levy in fall 2024 and cut 51 teachers amid $8.3 million in annual cuts.
How many more Reynoldsburg teachers would have been lost if a refund had been required?
That reality suggests lawmakers’ 40% threshold is way too low.
“While the intention to save taxpayer dollars is understandable, this item would significantly limit the amount of funding that school districts can carry over year-to-year, resulting in more districts asking taxpayers to pass levies more often, which could very well exacerbate property tax increases instead of reducing them,” DeWine wrote in his veto message.
He’s correct. We need fewer levy battles, not more.
More school income taxes could cancel state’s tax cut
Lawmakers also subjected Ohioans to another devious shell game that DeWine did not veto.
While reducing income taxes for those earning $100,000 or more from 3.5% to a flat 2.75% in 2026, those earning less than $100,000 — otherwise known as most Ohioans — did not get an income tax break.
At the same time, they have exacerbated conditions that are likely to force more school districts to pursue income taxes instead of property taxes.
The Westerville City School District near Columbus is already considering placing a 0.75% or 1.25% income tax before voters due to the uncertainty on property taxes, including a misguided citizen effort to repeal all property taxes.
So, if your household income in Westerville is $85,000, you get no state income tax reduction and the possibility of a new school income tax. If you make more than $100,000, your income tax cut could be very short-lived.
There’s an argument to be made that school income taxes are better than property taxes, especially for seniors who could be exempt from being taxed on retirement earnings.
But lawmakers’ decision to endorse a district-by-district refund plan instead of thoughtfully reforming taxes would create more confusion and higher local taxes.
It appears only state income taxes are bad. Who knew?
Whether DeWine’s vetoes survive or not, lawmakers have squandered another opportunity to address property taxes in a thoughtful way.
Lawmakers must sit down with all interested parties and discuss real solutions. With a possible ballot issue looming, the clock is ticking.
This editorial was written by Dispatch Executive Editor Michael Shearer on behalf of the editorial board of The Columbus Dispatch. Editorials are fact-based assessments of issues of importance to the communities we serve. These are not the opinions of our reporting staff members, who strive for neutrality in their reporting.
This article originally appeared on The Columbus Dispatch: DeWine’s property tax vetoes give lawmakers a second chance for real solutions | Editorial
Reporting by Columbus Dispatch Editorial Board / The Columbus Dispatch
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