Property tax proposal misses the mark

Poorly targeted bill will harm school districts, leave out property owners who need relief, and benefit some who don’t

Policy Matters Ohio’s analysis of Substitute House Bill 186 notes that the proposed legislation could strip nearly $1.7 billion from public schools over three years. Its tax relief measures would benefit property owners in Indian Hill, by some measures Ohio’s wealthiest community, while offering no relief to property owners in many of the state’s lowest-income and urban districts.  

In written testimony to the Ohio House Ways and Means Committee, Policy Matters tax researcher Aditi Srivastava and research director Zach Schiller urged legislators to defer action on the bill, citing the harm it would do to public schools and its failure to address the real concerns of many Ohio property owners.

“Of Ohio’s 609 school districts, 170 districts would lose at least 10% of their property tax revenue in Tax Year 2027, threatening layoffs, larger class sizes, and reduced academic offerings,” Srivastava said. “Eight districts would lose more than 20% for that year.”

“After the legislature abandoned the Fair School Funding Plan, these additional cuts could be devastating — and the so-called tax relief they pay for is poorly targeted and irresponsible,” Srivastava said. “Property owners in Indian Hill — where the average income tops $545,000 — would receive tax cuts, while East Cleveland residents, with a median income of just $28,636, get nothing.”

The bill would have no impact on property owners in six of Ohio’s ten poorest school districts: East Cleveland, Youngstown, Warren City, Northridge Local, Sandusky City, and Warrensville Heights. Property owners in major urban districts, including Akron, Canton, Cleveland, Columbus, Dayton, and Toledo are also left out.

The testimony calls for a more targeted solution: a property tax circuit breaker, which refunds property taxes above a set percentage of income, using state funds to ensure school districts and local services don’t lose critical funding. Some form of property tax circuit breaker is already used in 29 states. “A circuit breaker would ensure relief goes to those who truly need it, while holding schools harmless,” Srivastava added. “Ohioans deserve a targeted solution to rising property taxes. H.B. 186 is not that solution.”