With a state legislature bent on pleasing their biggest donors with year after year of tax cuts, local governments — those closest to the issues that matter to most Ohioans — are left to fend for themselves, with property taxes as one of their only tools.
Until state legislators stand up for regular Ohioans by facing down the wealthy and powerful, the rest of us will be forced to choose between increasing property taxes and harming our communities. There are three actions the state can take to enact a tax system that balances the interests of all taxpayers while adequately funding our public services.
- The state must provide adequate school funding. This can be done by adhering to the Fair School Funding Formula. The state has never met its constitutional obligation to provide adequate state support to public school in Ohio. With the Formula finally providing a pathway to meeting that obligation, both the Governor and House proposed budgets would significantly cut state aid. Less state aid means service cuts or more property tax levies.
- The same can be said with state support to both the Local Government Fund and the Public Library Fund. Cuts to both the share of income tax revenue these funds receive, and the income tax itself place libraries and local government into the same difficult bind. More state assistance can help fund these services while keeping regressive taxes low.
- Finally, the state needs to expand the property tax base. Class I property owners, which consist of residential or agricultural property, are overburdened. State lawmakers have provided so many carve outs to Class II property, which is used in businesses, that local entities have to ask residents for a higher share of their income to provide their services. The biggest carve out is the elimination of the tangible personal property tax. The elimination of this tax on most property used in businesses in 2011 removed over $2 billion annual from the property tax base. Businesses need to pay their fair share to lighten the load on residents. Reverse the elimination of the tangible personal property tax.
These steps are concrete actions our state legislature must take towards creating both an adequate and equitable tax system. I understand the drive by citizens to take matters into their own hands to deliver on tax relief. We have seen our legislature fail to meet Ohioans’ needs for property tax assistance, adequately fund public schools, and a litany of other issues. But abolishing the property tax because the legislature distorted the system is a step too far.
Ohio needs a legislature that will create a tax code that balances the interests of all Ohioans, not one catering to the wealthy and corporations. A legislature that is responsive to the needs of all of us, not just the influential and connected. One that will take the work of creating an adequate and equitable tax code seriously. Until that happens, everyday Ohioans will be forced to choose between relying more on property taxes or a lower quality of life with less accessible public services.
Bailey Williams (he/him) is Policy Matters Ohio’s Tax Researcher. He was born and raised in Troy, just north of Dayton.
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