Could Ohio culling state property taxes cause a ripple effect across the country?
Two of the most rapidly growing expenses for homeowners are insurance premiums and property taxes. Residents in one Midwestern state, fed up with inactivity from state legislatures to curb tax increases, are now trying to get property taxes in the state eliminated.
A group called the Citizens for Property Tax Reform is working to get a ballot issue in front of Ohio voters this November that would eliminate property taxes.
Last year, North Dakota voters rejected an issue that would have banned property taxes based on assessed value. While the Ohio group must gather 443,000 signatures in 44 of the state’s 88 counties by early July to get this issue on the ballot, many believe it might pass if presented to voters due to the continued increases in property tax bills.
Carlos Scarpero (pictured top), mortgage broker at Edge Home Finance, is concerned about where funding would come from if property taxes are abolished.
“I think they would have to change a lot for me to support, because I have a lot of concerns,” Scarpero told Mortgage Professional America. “Because that’s billions of dollars. I get it, though. I pay $3,000 to $4,000 a year, and I hate paying it. But at the end of the day, it’s not like you’re not going to owe that money somewhere else. They’ll either have to raise sales tax, income tax, or something else.”
According to the Ohio Department of Taxation’s most recent annual report, state property tax collections make up $20.3 billion in revenue.
Ohio residents pay one of the highest property tax rates in the nation. According to tax-rates.org, the state is 11th in median property tax rate as a percentage of home value at 1.36%. Scarpero, licensed in 33 states, notices the steep tax rates in his home state.
“I see everybody’s property taxes, and our taxes are high,” he said. “Especially if you’re in one of the cities because of all the school levies.”
Loss of funding could equal drop in property values
Many believe if property taxes are abolished, income and sales taxes will replace them. Scarpero said it’s not that simple.
“How are you going to have accountability if we switch to an income-based or property tax-based system?” Scarpero said. “Here in Dayton, we probably have 25 different school districts in Montgomery County. So, for a store at the Dayton Mall, how are they going to portion this out properly to the right district?
“Online is a whole different issue with eCommerce. How are you going to fairly give those tax monies to the actual district where the person was? Or are you going to give it all to the county, and the county figures it out?”
This means that if there isn’t a simple solution for replacing the lost revenue from abolished property taxes, entities currently being funded will struggle. Schools, which depend on property tax levies for funding, will likely struggle, if not close completely. Road and infrastructure projects will likely be held up. Scarpero said that both of those outcomes could affect property values.
“There’s certainly a correlation between good schools and having good property values,” he said. “So, people typically say, even though the tax rate stinks, they would rather pay a little bit, invest a little bit, rather than lose the value of the house. Absolutely, if the thing does pass, it could knock values down.”
Property tax ripple effect
Current affordability challenges have left homeowners and potential homebuyers frustrated. If Ohio voters get the chance in November and decide to eliminate property taxes, the question will be whether voters in other states take up the issue themselves.
Moody's US credit downgrade and proposed tax cuts could mean higher borrowing costs, says Odeta Kushi, Deputy Chief Economist at First American. The mortgage market faces challenges from economic turmoil. https://t.co/OdKbGhPQbw
— Mortgage Professional America Magazine (@MPAMagazineUS) May 27, 2025
“I think it’s possible,” Scarpero said. “There is a little bit of a national anti-property tax trend right now, so it very well could go on the ballot in other states. There are a lot of internet guys who talk about property taxes being evil or that they should be illegal. But they never give any context for what to put in that place (to replace property taxes).”
Because of the potential damage to entities funded by property taxes, Scarpero would have difficulty supporting such a ballot issue. He said the key to getting public support is for advocates to come up with a viable replacement that will prevent those entities from losing much-needed funding.
“If the petitioners came back and said, ‘We don’t want a property tax system, the system should be this,’ and it is going to be revenue neutral and nobody is going to lose their jobs,” he said. “If they find a fairer system and put that on the ballot, I would probably vote for that. But until then, they’re just talking smack (about property taxes).
“I’m not for this thing because I’m way too concerned. That’s way too much money to say no to.”
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