Do you want to be an American idiot? Scott's film show back on seven hundred w WELW. Ohio activists want to eliminate your property build tax entirely. Sound good? Okay, well, wait to hear what it could do to the sales tax.
Right.
So, rising property taxes are pricing a lot homeowners out of their homes. We've seen increases mildly twenty eight percent, but all the way up to one hundred and thirty percent across southwest Ohio here, and the committee who abolished property taxes is gathering signatures or a constitutional amendment that they want to put on the November ballots. So what's the good, the bad and the ugly of this? Ohio Representative David Thomas out of Jefferson, I said, Jefferson, not Jeffersonville.
That's in the how up here Ashtra Bulah Warren, Northeast Ohio. David, welcome to the show. How are you?
Oh, thank you so much for having me on.
Yeah, appreciate it. Governor de Wine warned about abolishing taxes and we'd see the tax rate jump up to twenty percent from the five point seventy five Now and other people say they're full of it. So, uh, do you agree with the math? Is the math math on this one? And even if it's close to ACR, can you justify that trade off?
Yeah, that's a great question. I think this shows just how upset and frustrated people are with the property tax system. But the math mass if you do essentially a one for one. So right now, roughly twenty four billion dollars is how much property taxes collect in every year, and all of that money stays to the local level that
funds your local services. And if you were to eliminate that twenty four billion, you would have to and I would assume most people would still want their local police departments, their fire their road services, all those different types of things,
and so you'd have to pull that revenue from somewhere else. Now, many folks who are very strong behind abolishing you know, say, hey, I'm perfectly fine to have a much much higher sales tax if that means I no longer have it on the property tax side, right, And so that that's kind of one of the trade offs that people have to
think about. But twenty percent, you know, that is essentially yes, that that's the number that we would likely have to get because areas like yours down in southwest Ohio, areas like Maya, Northeast Ohio. We have other states around us, and so you're going to have people who leave the states to buy things. You're going to have less activity
because things are going to be much more expensive. So you have to have the sales tax even higher than what you would directly need to replace that about twenty four billion dollars.
That's a question. So let's say, just for giggles here, that they're successful again on the ballot. People Okay, great, I don't have to pay any more. Proper decks my home are great. I don't have to pay this anymore. They came out and said, look, it's not our responsibility to figure out how to replace that twenty plus billion dollars in annual revenue that falls on the General Assembly.
People like yourself, David Thomas. What's your answer? Where would even be getting to look for that kind of money? I mean, you're saying the twenty percent tax wouldn't work, but what other options are there?
Yeah, they are correct, and that's kind of the I think the committee quite often, I know the leadership personally. They've allowed us to do a lot of the reform that we've done this past year because people now realize just how set folks are over property taxes. But essentially it is our responsibility. There's actually a constitutional amendment two years ago in North Dakota that very similar abolish everything.
It failed because it put in essentially the replacement revenue, and I think people then saw in the ballot, whoa, this will happen if the abolished and so they said no. But there's no way, no physical way that Ohio would go up to a twenty percent sales tax. It'd be impossible, right, And so then you have to look at essentially cutting costs. You've got to decrease how much money you're actually going to need for those services.
Yeah, you know, I tend to lean more libertarian all this stuff, but in the way I look at it as look, it's the least bad tax in the world. In this group and middlely, we don't like property taxes, but we don't really want to cut services that they fund. Despite going you know, government's bloated and fat and dozed and all that stuff, which I get, but when it comes to services that you use are available, and we don't want to do that. So it's contradictory on our
part for sure. And I think property taxes just are generally less distortionary. You know, you can, as you mentioned being in northeast Ohio and us here in southwest Ohio. Well, you know, if you don't like the prices because the sales tax is twenty percent, you can choose to do business in India and Kentucky. Well, the same is true with property tax. A lot of people I work with live in Kentucky for that reason. So you can move to places where you're less heavily taxed with avoid the
local sales tax and income taxes. I mean, real estate generally has to stay put. If you're a business owner, you can choose where you live. But I guess you know that this is the Hey, I don't want to pay taxes, but I want someone else to pay for it. Well who's that going to be?
Yeah, And that's a very interesting point you spart up about the business side. So businesses currently pay about a third to a half, depending on your local area and what kind of makes up the community, they pay a third to a half of the property tax bill. So one of the I guess the issues of concerns that I have is if you abolish and get rid of all property taxation, you're also been getting rid of property taxes on your lawmarks and on your manufacturing and your
your data centers. Bring up that fun topic, and you know then what happens when you have to move it over the income and sales tax. You're actually shifting that over to the individual as opposed to have in the business pay. So there's a lot of kind of philosophical questions about what could happen and what's a better way to do this, And I think it just brings up the whole idea that we can't we've not done any type of major changes on a property tax system in
fifty years. Nineteen seventy six was the last time. So it just really shows, you know, we've been overdue. And last year we've passed five strong bills plus was in the budget to really kind of correct what happened. And in my mind, we've essentially now said that the frustration that voters have, which is their tax bill goes up, they never had to say on it, and it's all because of the value spiking. Local government is getting unvoted
windfalls that they just didn't really need. We've essentially stopped that moving forward, that will not continue. So voters now have a lot more of that control with what levees are on the ballot, what do they actually want to pay for in support. But you know what percentage of levees passed last year in November, Okay, eighty seven percent.
So despite there being one hundreds of thousand centatures being collected a lot of people angry at property taxes, voters still approved eighty seven percent of the levees across Ohio. And there's a disconnect there. But there's also a thing of sense that if you're asked, hey, do you want to support your local fire department with this levee for
a fire truck, typically you're going to say yes. But if you're forced to pay over five hundred or one thousand dollars more your tax bill and you had no say over that, that's when you get really upset, and rightfully so, because that shouldn't happen. So we're correcting that moving forward.
He is Ohio represent of David Thomas, and he is the foremost expert, the generalist when it comes to this property tax You should I'm having them on because they're trying to get this on the ballot. A group called Abolish Ohio Property Taxes gathering signatures for a constitutional amendment in November that would eliminate our property taxes. The problem is they're like, well, we don't know how to replace it. That's y'all's job at in Columbus. We just don't want
any more. Property taxes could be as high as twenty percent or more the sales tax we pay in Ohio, which would be devastating to border cities like Cincinnati, for example. We already cut the local government fund I think back in twenty thirteen, and that FOS forced local communities to engage these levies in the first place. So if you push to abolished property taxes now the state with I mean, the finish what they started, right, Aren't you just shifting the burden rather reducing it.
That's a great question. I get asked a lot. Your state tax dollars pre twenty thirteen per twenty ten used to send a ton I think we had eight income tax brackets. You just sent a tone down to Columbus, and then it was Columbus decided, Okay, who's the winner, who's the losers? And how much do local communities get.
And the philosophy from twenty ten to now has been you should be sending a whole lot less to Columbus and then you have more money to decide do I want to support that fire department or the library or whatever local levee. And it's kind of local communities then picking what type of services they want versus that money going on to Columbus and then hoping to come back.
Because you're absolutely right, we have cut the little government fund that's the money that Columbus sends the local government in twenty ten. Now every year since then we've actually been increased in that percentage, and now it's not back to where it wasn't twenty ten, but it's pretty close. Alver, what is absolutely different than is our income tax rate. You know, we're now the lowest flat income tax in the nation at two point seventy five percent, and then
we're going to keep decreasing that. So there's there's trade oops with that. But in my mind, less to Columbus more in your pocket. To the side you might be paying more because you're being asked and you want to support the local services. I'd rather that money stay there than they come down to the Statehouse.
Yeah, I mean, this is the cost of that local money not coming back as well. We have to add more and more levees and now we're seeing property tax values go up and like and people are now I get it, but we we still have to fund government. Property tax is fun like sixty five percent of local government revenue. So school fire, police, ems. What for you were in northeast Ohio, what do you tell your constituents if this happens and those things will have to be reduced?
I mean, which one do you pick? Can you do without schools, fire police or ms?
Well, and that's a great point too, so you know, essentially less money from Columbus to local governments. Your comment of they've essentially moved over the levees to help make the difference up, But that didn't actually have to be the case. And my main kind of comments to my constituents, especially my local governments, have been we have to change that mindset that's always the property owner that we go to. Counties,
for example, have a sales tax option. Already we actually see Montgomery County funding their social services not through property taxes but through sales tax, or Washington County actually decreasing their township property taxes and making it up in a sales tax. That's one option at the county level. And obviously cities and villages they should have the lowest property taxes in the state because they have the income tax
locally and that can vary as well. And schools actually have an income tax option also, So there's other ways to fund our local governments, and we've given different options besides just the property needs. Yeah, and you know that's one thing now, but then if abolish happens, I would envision that kind of tell folks whatever other option that community has, city, village, township, county, they'll likely just increase and move up tremendously that that tax revery. Now.
He's represent David Thomas Rep. In the Ashtabulah Warren area, and he is a guy who is the foremost expert, I would say in General Assembly on property tax because we're all sweating right now. We're seeing rates go up as high as one hundred and thirty percent here in southwest Ohio and a lot of people just screaming stop the pain. And there's a group out there that's trying to get on the ballot. November just that a constitutional
amendment that would eliminate Ohio's property tax. But we got to pay for fiery ms, school police, all that stuff you don't get in your road. We had a rough winner here. I know you had a rough winner too, especially up north. We got hammer down here in Cincinnati, and hey, you know'd be nice if we can get some plows out there. That's a question as well. So
you know, even and you're a Republican. Hamlet County Auditor Jessica Miranda is a Democrat, says called I had her on on a year or so ago talking about this, and she said, it's tax shifting, not tax relief. That we keep cutting its obligations to locals from the state and it appears to help taxpayers, but it just kicks the can down to a different area. It's not really it's just tax shifting. It's not like, wow, I got my taxes, go hey, this is great. Yeah, but we
still got to pay for stuff. How do you do that? When Democrats and Republicans agree, it sounds like there's impetus to maybe make them change.
Yeah, And that's ultimate question is what level of government is actually the largest and what is actual tax reform. In my mind, actual tax reform is the taxpayer paying less overall, and it's the government getting less than overall. And if we continue to essentially promp up and make larger one area of government, which would then be for example, local government, all that really does is actually hate your tax money. It doesn't relieve you or decrease your burden.
It just actually is increasing and almost promoting larger growth. A perfect example of that, I say is the school systems. So you've probably heard and everyone says all of the state's cutting school funding, the state's cutting school funding. We have actually been increasing your tax dollars to public schools since twenty twenty, for example, every year almost a billion two billion dollars and so tremendous amounts more in taxpayer
dollars going to local schools. And if that theory were correct, that essentially the statements needs to pay more to local governments, then our school system should not need as much property
tax money. But what's actually happened over the last five years, as the state has increased school funding tremendously, schools have received, asked for taken even more on the property tax side, and they're essentially the philosophy that more is never enough, and so there has to be some type of limit, some type of control over that government size of government spending, and that's essentially trying to decrease in taxes.
And you mentioned school funding there that was ruled on constitual health. Well, I think even before I was doing talk Raati for goodnessake back in the nineties, and the state still has yeah fully implemented fair school funding. So if that disappears, that's a whole other crisis there isn't it.
The ninety seven decision, and that's the Darraf decision. It didn't actually say that property taxes were un constitutional for schools, or that it was the taxpayer who was being served unduly. It was actually more of the student. So we were back then essentially giving a whole bunch of money to wealthy areas, wealthy school districts and helping them wealthy kids versus your poor kids were really being left out. And
so now what we essentially do. We've had eight different funding formulas since nineteen ninety seven, and we kind of balance out the playing fields. So your wealthier areas, your state tax dollars still go to those schools, but a very smaller amount than your poorer areas. Think of in my neck of the woods, East Cleveland's Youngstown City schools. Those schools receive almost thirty thousand dollars per kid from your state tax dollars versus your wealthier school districts, those
received tremendously less. And that's essentially what that constitutional decision said we hadn't moved towards is trying to give an equal opportunity for each of his kids, regardless of you know, wealthier or poor. But using property taxes or local revenue, I think has to be a piece of that school funding side. When I tell folks that we spend over thirty billion dollars on public schools, their eyes just get wide because that that is over a third to almost half of our state budget.
And look at the results we get. That's a separate argument entirely. David, Oh, all right, that's insane. So I talked to I Want Bill Sites Bill Sites when he was in office, he was part of Mike Dwin's working group, and they came up with I believe twenty targeted relief recommendations, homestead exemptions, deferrals, levy reform, inflation caps. Well, why didn't that fix the problem, or why shouldn't have to fix the problem. I mean, you put the smartest minds out there. They said, Okay,
here's the plan, and here we are. Yeah.
So I joke, I'm the most speech tooled legislator right now. A lot of these different reforms were actually in the state budget last year. The governor vetoed almost all of them and then formed his working group to say, okay, what should we do? What if these policies are good? Back and bill sites. The working group actually backed up most of those policies that were in the budget, and then other ones too, So we passed five different bills
this past year. Those bills essentially stop them voted spikes, they give a lot more clarity on the ballot voter control, and they actually start decreasing tax bills starting second half of this year. So those were essentially the biggest changes we've made to the property tax system in fifty years. We still have a ton more to do, but we actually hit almost half of the recommendations of that study committee just last year alone in those five different bills.
Finally, David should voter listening to this thing, But four or against the proposal maybe getting on the belt in November.
So I don't think that this is the right thing to do, and I think that there's a lot of validity, and I would not begrudge anyone from voting yes because
of just how bad the system has gotten. I think that we can do a lot of good and a lot of changes that does not blow up the system and cause us to essentially have to redo everything, because unfortunately, there's about a month turnarounds from when folks vote to when this happens, and you're talking about the largest change in Ohio structure in our history happening in about one month.
I'd rather do that more planned out, more kind of long term, and have those changes actually help an impact versus what could happen in that part amount of time.
Well, we've seen this before. Bus listens with the marijuana thing, is that people want something and the legislature doesn't do anything, and then they come up with a grassroots effort in the legislature steps and so why well, hold on a second, that's kind of what's happening here. We'll find out how it plays out again. Ohio represent David Thomas up in Jefferson and northeast O Hiah, thanks for coming on the show this morning. I really appreciate it.
Oh, thank you so much.
Be Will it's a Scott's Loan show. Uh yeah, it's like, careful what you wish for, you might just get it. You know, it's America and we want everyone else to pay for what we want. I don't want. I want something, but you should pay for it. Welcome to the United States. News and Seconds here seven hundred WT