More Ohio school districts could pursue income tax levies as the state aims to reduce property tax burdens.
But who would pay those taxes?
Most Ohioans are probably familiar with municipal income taxes. All of the largest cities in the state charge them, as do hundreds of others. But far fewer Ohioans pay income taxes to school districts, which overwhelmingly rely on property taxes for their funding.
State lawmakers, though, are taking aim at school districts’ ability to levy property taxes as those bills have skyrocketed alongside home values. Both lawmakers who supported such changes and school districts expect them to fill the void with other taxes.
Who pays school income taxes?
Residents who live in a school district’s boundaries would be subject to a district income tax. Where that person works would not matter.
Only Ohio residents can be residents of a school district, according to the Ohio Department of Taxation. Part-year residents of Ohio are also considered residents of a school district during their time as Ohio residents.
Any person or estate that receives income while a resident of a taxing school district is subject to the school district income tax.
Districts can seek levies on all income or on earned income, which would not include retirement income.
To find your school district and its tax rate, you can enter your district or address into the Ohio Department of Taxation searchable database.
Why are school income taxes a greater possibility?
The state budget, passed June 25, eliminates certain types of property tax levies, including replacement property tax levies, and tweaks what’s known as the 20-mill floor, which guarantees a certain amount of revenue for districts.
Most Ohio public schools get the vast majority of their revenue from local property taxes and state funding.
The budget proposal has now been sent to Gov. Mike DeWine, who must sign it before July 1. DeWine can also veto individual items he doesn’t support.
How many school districts have income taxes in Ohio?
Not all school districts have an income tax. At the beginning of 2025, 210 Ohio school districts have an income tax, meaning that just over a third of all Ohio school districts have income tax collection.
In southwest Ohio, nine districts currently levy a local income tax:
In 2025, no school districts have added new income taxes, according to the Ohio Department of Taxation. However, 18 school districts have renewed existing property taxes and two existing income taxes expired.
Some schools pushing income taxes as solution amid property tax uncertainty
Some school districts across the state are already seeking new income taxes, citing uncertainty over state funding.
On June 24, Westerville City School Board, in suburban Columbus, approved two proposed income taxes to offset projected budget gaps.
If certified by the Ohio Department of Taxation, a 0.75% earned income tax could be placed on the Nov. 5 general election. The tax would raise an estimated $24.3 million for Westerville schools, according to the district. An alternate 1.25% tax could be used if Ohio House Bill 335 becomes law.
House Bill 335 would eliminate inside millage, or what homeowners can be taxed without voter approval. The Ohio Constitution allows local governments to collect up to 10 mills, or 1% of a property’s taxable value, without asking voters.
Westerville school officials have argued that eliminating a portion of the district’s inside millage would cost them $16.3 million annually.
Earlier this year, Westerville school board abandoned plans to place a renewal levy on the May ballot after voters rejected by 52% a combined levy-bond issue in November 2024. The 37-year bond issue would have generated $140 million for school construction and improvements.
Cole Behrens covers K-12 education and school districts in central Ohio. Have a tip? Contact Cole at cbehrens@dispatch.com or connect with him on X at @Colebehr_report
This article originally appeared on The Columbus Dispatch: Ohio school districts could look to income tax hikes if changes are made to property tax
Reporting by Cole Behrens, Columbus Dispatch / The Columbus Dispatch
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