If voters decide to wipe out property taxes, Ohioans could end up seeing sales, income or other tax rates jacked up to cover the cost of schools, emergency services and other needs.
But by how much?
Ohio’s income tax rates, now the second lowest in the nation among states with income taxes, could jump to “an astronomical figure” and the sales tax rate could reach 20%, said Gov. Mike DeWine on Feb. 5.
“A 20% sales tax in the state of Ohio on products you buy. It would be absolutely devastating,” he said.
If property taxes were replaced with higher income taxes, the rate would soar from the current 2.75% flat tax to between 11% and 15%, according to the Ohio Office of Budget and Management.
In November, voters could be asked to weigh in on ballot issues that include marijuana laws, gay marriage rights and property taxes.
The issue getting the most attention this year is a push to eliminate local property taxes. Organizers need to collect 413,000 valid voter signatures by July to qualify for the statewide ballot. Property taxes generate more than $24 billion statewide, primarily funding schools and local services.
The state budget office issued a three-page advisory Feb. 6, detailing doomsday scenarios if the proposal were to pass.
Since 60% of local property taxes go toward funding schools, it would mean mass layoffs, building closures and larger class sizes, the advisory said.
Police and fire departments, particularly in smaller communities, would close stations and deliver slower emergency response times, it said. And an array of other services – libraries, parks and senior programs – would face “severe cuts or elimination.”
DeWine called the proposed constitutional amendment a “huge threat.”
“If that passed, it would just be devastating to all kinds of local governments, starting with schools but also police and fire, mental retardation levies. All of those would go away and we’d be in a huge crisis in the state of Ohio,” DeWine said.
Republican Vivek Ramaswamy, who is running to replace DeWine as governor, has pledged to eliminate the income tax and previously proposed getting rid of property taxes, which make up more than half of the state’s tax revenue. The other key source of money is sales tax.
State government reporter Laura Bischoff can be reached at lbischoff@usatodayco.com and @lbischoff on X.
This article originally appeared on The Columbus Dispatch: Gov. Mike DeWine says eliminating property taxes could lead to 20% sales tax
Reporting by Laura A. Bischoff, Columbus Dispatch / The Columbus Dispatch
USA TODAY Network via Reuters Connect
