Is There a Better Solution Than Axing Property Taxes in Ohio? One State Senator Thinks So 

Ohio is among a handful of states where voters are campaigning for the end of property taxes. 

It’s a divisive issue, with a grassroots effort gaining steam as Gov. Mike DeWine continues to warn of the severe financial implications.

But as it happens, there’s an alternative being suggested by a state lawmaker, one he believes could be a more effective option than eliminating property taxes statewide.

Is a land value tax the answer for Ohio?

Ohio state Sen. Bill Blessing (R-Colerain Township) recently introduced Senate Joint Resolution 7, which would allow—but not require—local governments to tax only the value of land, rather than the total property value including homes and buildings. 

Blessing argues that property taxes discourage development because taxes increase when property owners improve or build on their land. A land value tax, by contrast, would tax the land the same regardless of what’s built on it—removing what he sees as a penalty on development. 

“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, according to the Ohio Capital Journal. “And as many of you know, if we’re going to tax improvements, we get less of them.”

The proposal would need supermajority approval in the legislature before going to voters, but Blessing believes it could encourage more housing construction, increase supply, lower housing costs, and potentially raise more total revenue while reducing individual tax bills.

Ohio's property tax problem

It’s safe to say that Ohio has a skyrocketing property tax problem. Millions of homeowners across the state are watching their bills rise with no end in sight. 

In Mahoning County, the tax delinquency rate hit 18% late last year, with more than $70 million in unpaid property taxes. In Cuyahoga County, values jumped 32% on average after reassessments, fueling a $60 million increase in past-due balances.

Grassroots campaigns in the state are pushing for a proposed constitutional amendment that would eliminate taxes on real property and bar any future version of them.

However, a memo released by Ohio's Office of Budget Management in early February indicates that a repeal would create a $24 billion shortfall in local government budgets. This deficit would put funding for schools, police, fire departments, libraries, parks, and senior services at risk unless legislators can secure a replacement funding source of an unprecedented magnitude.

That’s why Blessing believes Ohio should tax the underlying land instead.

“A very likely outcome,” Blessing said, “is that land value taxes would bring in more money in the aggregate, while lowering tax bills for individuals and reducing housing costs due to the added supply.”

However, another key component of the proposal involves how the tax would be approved. The Ohio Constitution allows local governments to levy up to 10 mills (or 1%) in property taxes, but any additional levy must go before voters.

Blessing wants land taxes to function differently. Rather than requiring voter approval, local taxing authorities could impose them with a simple majority vote.

He argues this approach would give governments greater revenue certainty while still keeping elected officials accountable at the ballot box.