Come November, voters in Ohio may have to choose in voting booths between competing amendments to their state constitution concerning property taxes. That could be the case, "if a legislative proposal to allow land value taxes and a citizen-initiated constitutional amendment to abolish property taxes both make the ballot," according to The Toledo Blade.
Property taxes are a hot topic in the state. "In Mahoning County, the tax delinquency rate hit 18% late last year, with more than $70 million in unpaid property taxes," reports Realtor.com. "In Cuyahoga County, values jumped 32% on average after reassessments, fueling a $60 million increase in past-due balances."
Essential Revenue for Local Governments
Ohioans and those in many other states are fed up with rising property taxes. The median property tax bill in the U.S. in 2024 was $3,500, and vanishingly few homeowners are likely to have seen falls since then.
However, the revenue raised goes to fund local services that many residents find essential. Last month, Ohio's Office of Budget and Management Director Kimberly Murnieks sent a memorandum to the governor laying out the consequences of an outright abolition of property taxes:
"A proposed constitutional amendment would eliminate property taxes in Ohio and permanently ban them statewide, cutting off a critical source of funding for local schools, police and fire departments, emergency services, and other essential community services," wrote Murnieks. "Today, property taxes, including real property and public utility personal property taxes, generate about $24 billion each year for local governments across the state. To put this into perspective, that’s equal to the total revenue from Ohio’s state income and sales taxes combined."
Do the Buckeyes who root for the abolition of property taxes want to see these essential services end? Or do they wish to see the state's income- and sales-tax rates double?
Because after decades of efficiency drives and budget cuts in local government, it's unlikely that there's room to deliver more for less.
The Land Value Tax Alternative
Ohio State Sen. Bill Blessing, R-Colerain Twp., thinks he has an alternative to abolishing property taxes. He wants to replace them with a land value tax.
As the name implies, this would raise tax only on the value of a resident's land, not on the combined value of the land and the buildings on it, as is currently the case. "His proposal, Ohio Senate Joint Resolution 7, would need supermajority support in both chambers of the General Assembly before it could go before voters," says The Ohio Capital Journal.
Blessing argues that property taxes deter investment in development, while land value tax does not.
"Why are land value taxes superior to property taxes? Quite simply, they don’t tax development," Blessing told an Ohio Senate committee earlier this month, quoted in the Journal. "And as many of you know, if we’re going to tax improvements, we get less of them."
This makes sense, although the highest property taxes nationwide are paid in a few counties in California, New York and New Jersey, according to an interactive map from the Tax Foundation. It would be interesting to see if there's evidence of a correlation or causation between those high rates and lower investment in property development.
Most tellingly, Blessed acknowledges that a land value tax won't reduce Ohioans' overall tax burden, although he believes it could result in more home construction, which might spread that burden across more taxpayers. "A very likely outcome is that land value taxes would bring in more money in the aggregate, while lowering tax bills for the individual and reducing housing costs due to the added supply," he says, again quoted in The Journal.
Death and Taxes
