Abolishing Property Taxes and the State Income Tax? Ohio Deserves an Honest Fiscal Conversation.

In February, I attended the Ohio Township Association conference and heard Governor Mike DeWine address township officials from across Ohio. I even had the opportunity to take a photo with him afterward. 

Pictured: Trustee Amy Heutmaker and Ohio Governor Mike DeWine

But what stayed with me wasn’t the photo, okay the photo too.

It was the math. 

Standing in a room filled with trustees, fiscal officers, fire chiefs, and local officials who are legally required to pass balanced budgets, the governor said: 

“If we were to replace the money lost by eliminating real estate taxes with the state sales tax, the state sales tax would have to go up to somewhere between 15 and 18 percent.” 

He also explained that replacing property taxes with income tax revenue would require combined rates in the range of 11 to 15 percent, from state, county, school districts, and local governments. Those are New York State numbers, I know, I moved from New York to Ohio!

Those weren’t applause lines. 

They were structural warnings. 

And in today’s environment — where some are advocating eliminating property taxes and others are proposing abolishing the state income tax entirely — those warnings deserve serious attention. 

Because this is not theoretical. 

• It affects schools. 

• It affects counties. 

• It affects townships. 

• It affects public safety. 

• And it affects whether Ohio’s fiscal system remains stable. 

What Property Taxes Actually Fund 

Property taxes are easy to criticize. They are visible. They show up in large semiannual bills. They rise when property values rise. 

But property taxes fund the structural core of local government in Ohio: 

• Public schools 

• Fire and EMS services 

• Police departments 

• Road and bridge maintenance 

• Libraries 

• County operations 

• Bond repayment for capital projects 

In many townships and school districts, property tax revenue is not one source among many. It is the primary local funding mechanism. 

Eliminate that pillar, and you are not trimming inefficiency. 

You are removing the foundation. 

The Replacement Math Is Not Optional 

Governor DeWine’s estimate of a 15–18 percent sales tax to replace property taxes was not a rhetorical exaggeration. It reflects the sheer scale of property tax revenue statewide. 

Property taxes in Ohio generate tens of billions of dollars annually. Replacing that revenue requires: 

• Dramatic increases in sales taxes up to 18% by Governor DeWine's estimate

• Dramatic increases in income taxes 

• Or significant reductions in services 

  
  

There is no fourth option where the money simply disappears, and everything continues functioning normally. 

• Payrolls don't not vanish. 

• School buses still run. 

• Snow is still falling. 

• Debt obligations remain legally binding and credit ratings plumet. 

The math has to close. 

Now Layer in Income Tax Abolition 

Ohio gubernatorial candidate Vivek Ramaswamy has pledged to eliminate the state income tax, stating: 

“That’s why, on my watch, we’re going to make Ohio a zero-income tax state, because you deserve to keep what you earn. It is your money, not the government’s.” 

That line resonates emotionally. It sounds empowering. 

But in the current fiscal structure, pairing income tax abolition with property tax elimination creates a serious structural problem. 

Governor DeWine addressed the competitiveness argument directly when he said: 

“No company is looking at Ohio and saying our income tax rate is too high at 2.5%.” 

Ohio’s income tax rate is not nationally extreme. It is already comparatively moderate. 

If eliminating property taxes would require raising income taxes to 11–15 percent, and eliminating income taxes removes another major revenue lever entirely, what remains? 

• Sales taxes. 

• Fees. 

• Excise taxes. 

• Consumption-based revenue streams. 

Those revenue sources are more volatile and often more regressive. 

That is not a recipe for stability. 

What Happens in “No Income Tax” States? 

There is no such thing as a zero-tax state. Revenue does not disappear. It relocates. 

• 
  

  Texas 

  • Texas has no state income tax, but it relies heavily on property taxes. Texas homeowners often face property tax rates exceeding 2 percent of assessed value. Schools and local governments depend on that revenue. 

• Washington 

  • Washington has no state income tax but relies heavily on sales taxes, with combined rates exceeding 10 percent in many areas. Sales taxes disproportionately impact lower-income households. 

• Delaware 

  • Delaware has no sales tax but relies heavily on income taxes and corporate franchise taxes. It did not eliminate revenue — it shifted the structure. 

The pattern is consistent. 

When one major tax is eliminated, others increase. 

The burden does not vanish. 

Stability Matters for Public Safety and Schools 

Property taxes are one of the most stable revenue sources available to local governments. They are tied to assessed property value rather than short-term consumer spending or employment swings. 

• Sales taxes fluctuate during recessions. 

• Income taxes fluctuate with wage trends. 

• Police still respond to calls during downturns. 

• Fire departments still staff shifts. 

• Road crews still plow. 

• Stable funding matters. 

Replacing stable property tax revenue with volatile consumption-based revenue increases risk during economic contractions. 

What About Schools and Bond Obligations? 

Ohio’s public schools rely heavily on property tax levies. Capital improvements are often financed through bonds backed by property tax millage. 

Eliminating property taxes without a fully modeled replacement plan would: 

• Disrupt school funding formulas 

• Affect bond repayment structures 

• Potentially impact credit ratings 

• Increase borrowing costs 

Financial markets do not reward uncertainty. 

Even a phased elimination would require: 

• Constitutional considerations 

• Major legislative restructuring 

• Transition planning 

• Revenue equalization modeling 

That is not a one-paragraph solution. 

Reform vs. Demolition 

Ohio’s property tax system is not perfect. There are legitimate concerns: 

• Senior homeowners on fixed incomes 

• Levy fatigue 

• Complexity in millage stacking 

• Transparency improvements 

  
  

Those are serious conversations worth having. 

But eliminating foundational revenue systems without legally viable, fiscally modeled replacements is not simplification. 

It is demolition. 

Reform improves structure. 

Demolition removes it. 

The Responsible Question 

The responsible question is not: 

“How do we eliminate taxes?” 

It is: 

“How do we fund essential services fairly, predictably, and sustainably?” 

Governor DeWine’s warning was arithmetic, not ideology. 

If eliminating property taxes requires dramatic increases in other taxes, and eliminating income taxes removes a stabilizing mechanism entirely, the burden does not disappear. 

It shifts. 

And when revenue shifts toward more volatile sources, schools, counties, and townships become more vulnerable — not less. 

I heard those remarks live. I was in the room. And the tone was not political theater. It was structural caution delivered to people who understand how budgets actually work. 

Ohio deserves real reform conversations. 

But real reform begins with math. 

Not slogans.