Ohio Governor Mike DeWine Warns Property Tax Ban May Lead to Increased Taxes
Fox 5’s ‘Good Day New York’ co-host Rosanna Scotto joins ‘Varney & Co.’ to break down Mamdani’s proposed property tax hike and what it could mean for New York homeowners, renters, and small businesses.
A proposal to abolish property taxes in Ohio could lead to a significant increase in other forms of taxation if voters approve the measure, according to the state’s governor. Governor Mike DeWine, a Republican, expressed concerns at a recent conference, stating that if the proposed constitutional amendment to eliminate property taxes makes it to the ballot and is passed, the state may have to raise sales taxes to compensate for the lost revenue.
The initiative is currently in the signature-gathering phase, which must be certified before it can appear on the ballot this fall. Advocates argue that abolishing property taxes would provide relief to homeowners.
THESE STATES ARE CONSIDERING ELIMINATING PROPERTY TAXES FOR HOMEOWNERS
Ohio Gov. Mike DeWine warned that abolishing property taxes would have a significant impact on the state’s finances. (Jason Mowry/Getty Images)
“Sales tax could go up to 17, 18, 19, 20%, sales tax in the state of Ohio on products that you buy,” DeWine stated, as reported by Cleveland.com. “So, it would be absolutely devastating.”
He further indicated that Ohio lawmakers might need to consider increasing other taxes, such as income taxes, to fill the estimated $24 billion budget gap that would arise from eliminating property taxes.
The Ohio Office of Management and Budget recently released a memo analyzing the proposed amendment, highlighting that the $24 billion in annual property tax receipts is equivalent to the total revenue generated from both state income and sales taxes combined.
“Eliminating property taxes would immediately destabilize local budgets and force deep cuts to essential services, reducing or eliminating funding for local law enforcement, first responders, and schools, delaying road and infrastructure repairs, and threatening services for seniors and people with disabilities,” the memo stated.
Approximately three-fifths of property tax revenue supports local school districts. The elimination of property taxes could lead to thousands of layoffs among school staff, larger class sizes, school closures, and program cuts.
ABBOTT UNVEILS 5-POINT PLAN TO OVERHAUL TEXAS PROPERTY TAXES, TARGETING RELIEF FOR HOMEOWNERS
Ohio’s property tax revenue amounts to $24 billion, equal to the combined revenue from sales and income taxes. (iStock)
Police, fire, and EMS services heavily rely on property tax revenues. Eliminating these funding sources could lead to station closures, especially in smaller communities, and result in reduced staffing and slower response times, as noted in the memo.
Additionally, libraries, parks, health and human services, and support services for seniors would face cuts or elimination, negatively impacting the community’s quality of life. Programs related to seniors, health, recovery, and developmental disabilities could lose funding, increasing the strain on hospitals and state systems.
The Ohio budget office’s memo also pointed out that the state currently provides some property tax relief through a homestead exemption for seniors and residents with disabilities, as well as a tax credit for residential homeowners.
Ohio exempts food from sales taxes, which could change if property taxes are eliminated. (Hollie Adams/Bloomberg)
The memo also highlighted the challenges of replacing the $24 billion in property tax revenue. The nonpartisan Tax Foundation estimated that income tax rates would need to quadruple or more, reaching between 11% and 15% statewide to replace property taxes.
Currently, Ohio has a flat state income tax rate of 2.75%, which is among the lowest in the nation. The personal income tax generated $10.5 billion in revenue during fiscal year 2025.
The budget office consulted with the Ohio Department of Taxation regarding replacing property taxes with state sales tax revenue. They estimated that sales tax rates would need to approach 15% to 18%, significantly higher than those in other states.
While a lower sales tax rate could potentially cover the lost property tax revenue, it would require broadening the sales tax to include currently exempt items like food and healthcare. Such changes would necessitate legislative and, in some cases, constitutional amendments, as noted by the budget office.
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Ohio’s current sales tax rate stands at 5.75%, placing it near the middle nationally for combined state and local sales tax rates. The sales tax generated $14 billion in fiscal year 2025.
Fox 5’s ‘Good Day New York’ co-host Rosanna Scotto joins ‘Varney & Co.’ to break down Mamdani’s proposed property tax hike and what it could mean for New York homeowners, renters, and small businesses.
A proposal to abolish property taxes in Ohio could lead to a significant increase in other forms of taxation if voters approve the measure, according to the state’s governor. Governor Mike DeWine, a Republican, expressed concerns at a recent conference, stating that if the proposed constitutional amendment to eliminate property taxes makes it to the ballot and is passed, the state may have to raise sales taxes to compensate for the lost revenue.
The initiative is currently in the signature-gathering phase, which must be certified before it can appear on the ballot this fall. Advocates argue that abolishing property taxes would provide relief to homeowners.
THESE STATES ARE CONSIDERING ELIMINATING PROPERTY TAXES FOR HOMEOWNERS
Ohio Gov. Mike DeWine warned that abolishing property taxes would have a significant impact on the state’s finances. (Jason Mowry/Getty Images)
“Sales tax could go up to 17, 18, 19, 20%, sales tax in the state of Ohio on products that you buy,” DeWine stated, as reported by Cleveland.com. “So, it would be absolutely devastating.”
He further indicated that Ohio lawmakers might need to consider increasing other taxes, such as income taxes, to fill the estimated $24 billion budget gap that would arise from eliminating property taxes.
The Ohio Office of Management and Budget recently released a memo analyzing the proposed amendment, highlighting that the $24 billion in annual property tax receipts is equivalent to the total revenue generated from both state income and sales taxes combined.
“Eliminating property taxes would immediately destabilize local budgets and force deep cuts to essential services, reducing or eliminating funding for local law enforcement, first responders, and schools, delaying road and infrastructure repairs, and threatening services for seniors and people with disabilities,” the memo stated.
Approximately three-fifths of property tax revenue supports local school districts. The elimination of property taxes could lead to thousands of layoffs among school staff, larger class sizes, school closures, and program cuts.
ABBOTT UNVEILS 5-POINT PLAN TO OVERHAUL TEXAS PROPERTY TAXES, TARGETING RELIEF FOR HOMEOWNERS
Ohio’s property tax revenue amounts to $24 billion, equal to the combined revenue from sales and income taxes. (iStock)
Police, fire, and EMS services heavily rely on property tax revenues. Eliminating these funding sources could lead to station closures, especially in smaller communities, and result in reduced staffing and slower response times, as noted in the memo.
Additionally, libraries, parks, health and human services, and support services for seniors would face cuts or elimination, negatively impacting the community’s quality of life. Programs related to seniors, health, recovery, and developmental disabilities could lose funding, increasing the strain on hospitals and state systems.
The Ohio budget office’s memo also pointed out that the state currently provides some property tax relief through a homestead exemption for seniors and residents with disabilities, as well as a tax credit for residential homeowners.
Ohio exempts food from sales taxes, which could change if property taxes are eliminated. (Hollie Adams/Bloomberg)
The memo also highlighted the challenges of replacing the $24 billion in property tax revenue. The nonpartisan Tax Foundation estimated that income tax rates would need to quadruple or more, reaching between 11% and 15% statewide to replace property taxes.
Currently, Ohio has a flat state income tax rate of 2.75%, which is among the lowest in the nation. The personal income tax generated $10.5 billion in revenue during fiscal year 2025.
The budget office consulted with the Ohio Department of Taxation regarding replacing property taxes with state sales tax revenue. They estimated that sales tax rates would need to approach 15% to 18%, significantly higher than those in other states.
While a lower sales tax rate could potentially cover the lost property tax revenue, it would require broadening the sales tax to include currently exempt items like food and healthcare. Such changes would necessitate legislative and, in some cases, constitutional amendments, as noted by the budget office.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Ohio’s current sales tax rate stands at 5.75%, placing it near the middle nationally for combined state and local sales tax rates. The sales tax generated $14 billion in fiscal year 2025.
