Local taxpayers bear burden of Ohio cuts
Study looks at trend dating to 1976
6/24/2014COLUMBUS — Part of Democrats’ criticism of Gov. John Kasich has been that his emphasis on tax cuts at the state level has pushed the burden onto local taxpayers. But a study released Monday said this shift has been happening for decades.
The study by the Education Tax Policy Institute conducted for three statewide public school administrator organizations showed that while more recent policies will exacerbate the trend, decisions made decades ago that may make sense at the state level have led schools to depend more and more on local homeowners and farmers to pay their bills.
The study points in particular to the state’s decision to eliminate the tangible personal property tax, an unpopular tax on business inventory, equipment, furnishings, and fixtures that served as a huge source of revenue for schools.
That policy was begun in 2005 under Republican Gov. Bob Taft, but its phaseout was accelerated under Mr. Kasich’s first budget passed in 2011. Neither the governor nor his predecessors — Ted Strickland, a Democrat, and Mr. Taft — identified a replacement source of funding.
“While the rationale for the changes to the TPP tax are sound from a state perspective, the impact on schools, other local governments, and other taxpayers is undeniable ...,” reads the report. “In Tax Year 1991, total TPP taxes were 32.1 percent of school district property taxes. In tax year 2011, TPP taxes comprised only 5.7 percent of the total school district taxes paid.”
During the same period, taxes paid by residential and agricultural property owners climbed from 47.5 percent of all property taxes to 69.9 percent.
Among northwest Ohio districts, Sandusky County’s Woodmore Local School District saw the most pronounced shift under the study, ranking fourth statewide. It saw its local property tax burden shift 46.3 percentage points in the direction of residential and agricultural property to 83.6 percent.
Toledo Public Schools shifted 15.6 percentage points toward residential and farm property owners to 56.4 percent.
“Since 2011, Governor Kasich has accelerated this shifting of the tax burden on hardworking Ohioans in order to fund tax breaks for his wealthy friends,” said Lauren Hitt, spokesman for Mr. Kasich’s Democratic opponent, Ed FitzGerald. “And reports like these illustrate the facts Governor Kasich is a tax-shifter, not a tax-cutter.”
The report looks back as far as 1976 when legislation was passed to prevent school districts from experiencing a windfall because of rising property values.
“Their new-found concern for high taxes is refreshing but a little suspect given their opposition to the $3 billion in tax cuts enacted by Governor Kasich,” Kasich spokesman Rob Nichols said. But he noted much of the report focuses on an era before current administration’s policies were enacted.
The study was conducted for the Ohio School Boards Association, Buckeye Association of School Administrative Officials, and Ohio Association of School Business Officials.
While the report looked at policies through 2011, it also pointed to more recent changes it expects to increase schools’ dependence on local taxpayers.They included decisions made in the current two-year budget in which the state will no longer pay 10 percent of the local property tax bill for new levies passed and impose income restrictions on other property tax breaks for senior citizens, the disabled, and other homeowners.
Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.