Speaker 1: Do you want to be an American idiot? Scott's film
Speaker 1: show back on seven hundred w WELW. Ohio activists want
Speaker 1: to eliminate your property build tax entirely. Sound good? Okay, well,
Speaker 1: wait to hear what it could do to the sales tax.
Speaker 2: Right.
Speaker 1: So, rising property taxes are pricing a lot homeowners out
Speaker 1: of their homes. We've seen increases mildly twenty eight percent,
Speaker 1: but all the way up to one hundred and thirty
Speaker 1: percent across southwest Ohio here, and the committee who abolished
Speaker 1: property taxes is gathering signatures or a constitutional amendment that
Speaker 1: they want to put on the November ballots. So what's
Speaker 1: the good, the bad and the ugly of this? Ohio
Speaker 1: Representative David Thomas out of Jefferson, I said, Jefferson, not Jeffersonville.
Speaker 1: That's in the how up here Ashtra Bulah Warren, Northeast Ohio. David,
Speaker 1: welcome to the show. How are you?
Speaker 2: Oh, thank you so much for having me on.
Speaker 1: Yeah, appreciate it. Governor de Wine warned about abolishing taxes
Speaker 1: and we'd see the tax rate jump up to twenty
Speaker 1: percent from the five point seventy five Now and other
Speaker 1: people say they're full of it. So, uh, do you
Speaker 1: agree with the math? Is the math math on this one?
Speaker 1: And even if it's close to ACR, can you justify
Speaker 1: that trade off?
Speaker 2: Yeah, that's a great question. I think this shows just
Speaker 2: how upset and frustrated people are with the property tax system.
Speaker 2: But the math mass if you do essentially a one
Speaker 2: for one. So right now, roughly twenty four billion dollars
Speaker 2: is how much property taxes collect in every year, and
Speaker 2: all of that money stays to the local level that
Speaker 2: funds your local services. And if you were to eliminate
Speaker 2: that twenty four billion, you would have to and I
Speaker 2: would assume most people would still want their local police departments,
Speaker 2: their fire their road services, all those different types of things,
Speaker 2: and so you'd have to pull that revenue from somewhere else. Now,
Speaker 2: many folks who are very strong behind abolishing you know, say, hey,
Speaker 2: I'm perfectly fine to have a much much higher sales
Speaker 2: tax if that means I no longer have it on
Speaker 2: the property tax side, right, And so that that's kind
Speaker 2: of one of the trade offs that people have to
Speaker 2: think about. But twenty percent, you know, that is essentially yes,
Speaker 2: that that's the number that we would likely have to
Speaker 2: get because areas like yours down in southwest Ohio, areas
Speaker 2: like Maya, Northeast Ohio. We have other states around us,
Speaker 2: and so you're going to have people who leave the
Speaker 2: states to buy things. You're going to have less activity
Speaker 2: because things are going to be much more expensive. So
Speaker 2: you have to have the sales tax even higher than
Speaker 2: what you would directly need to replace that about twenty
Speaker 2: four billion dollars.
Speaker 1: That's a question. So let's say, just for giggles here,
Speaker 1: that they're successful again on the ballot. People Okay, great,
Speaker 1: I don't have to pay any more. Proper decks my
Speaker 1: home are great. I don't have to pay this anymore.
Speaker 1: They came out and said, look, it's not our responsibility
Speaker 1: to figure out how to replace that twenty plus billion
Speaker 1: dollars in annual revenue that falls on the General Assembly.
Speaker 1: People like yourself, David Thomas. What's your answer? Where would
Speaker 1: even be getting to look for that kind of money?
Speaker 1: I mean, you're saying the twenty percent tax wouldn't work,
Speaker 1: but what other options are there?
Speaker 2: Yeah, they are correct, and that's kind of the I
Speaker 2: think the committee quite often, I know the leadership personally.
Speaker 2: They've allowed us to do a lot of the reform
Speaker 2: that we've done this past year because people now realize
Speaker 2: just how set folks are over property taxes. But essentially
Speaker 2: it is our responsibility. There's actually a constitutional amendment two
Speaker 2: years ago in North Dakota that very similar abolish everything.
Speaker 2: It failed because it put in essentially the replacement revenue,
Speaker 2: and I think people then saw in the ballot, whoa,
Speaker 2: this will happen if the abolished and so they said no.
Speaker 2: But there's no way, no physical way that Ohio would
Speaker 2: go up to a twenty percent sales tax. It'd be impossible, right,
Speaker 2: And so then you have to look at essentially cutting costs.
Speaker 2: You've got to decrease how much money you're actually going
Speaker 2: to need for those services.
Speaker 1: Yeah, you know, I tend to lean more libertarian all
Speaker 1: this stuff, but in the way I look at it
Speaker 1: as look, it's the least bad tax in the world.
Speaker 1: In this group and middlely, we don't like property taxes,
Speaker 1: but we don't really want to cut services that they fund.
Speaker 1: Despite going you know, government's bloated and fat and dozed
Speaker 1: and all that stuff, which I get, but when it
Speaker 1: comes to services that you use are available, and we
Speaker 1: don't want to do that. So it's contradictory on our
Speaker 1: part for sure. And I think property taxes just are
Speaker 1: generally less distortionary. You know, you can, as you mentioned
Speaker 1: being in northeast Ohio and us here in southwest Ohio. Well,
Speaker 1: you know, if you don't like the prices because the
Speaker 1: sales tax is twenty percent, you can choose to do
Speaker 1: business in India and Kentucky. Well, the same is true
Speaker 1: with property tax. A lot of people I work with
Speaker 1: live in Kentucky for that reason. So you can move
Speaker 1: to places where you're less heavily taxed with avoid the
Speaker 1: local sales tax and income taxes. I mean, real estate
Speaker 1: generally has to stay put. If you're a business owner,
Speaker 1: you can choose where you live. But I guess you
Speaker 1: know that this is the Hey, I don't want to
Speaker 1: pay taxes, but I want someone else to pay for it.
Speaker 1: Well who's that going to be?
Speaker 2: Yeah, And that's a very interesting point you spart up
Speaker 2: about the business side. So businesses currently pay about a
Speaker 2: third to a half, depending on your local area and
Speaker 2: what kind of makes up the community, they pay a
Speaker 2: third to a half of the property tax bill. So
Speaker 2: one of the I guess the issues of concerns that
Speaker 2: I have is if you abolish and get rid of
Speaker 2: all property taxation, you're also been getting rid of property
Speaker 2: taxes on your lawmarks and on your manufacturing and your
Speaker 2: your data centers. Bring up that fun topic, and you
Speaker 2: know then what happens when you have to move it
Speaker 2: over the income and sales tax. You're actually shifting that
Speaker 2: over to the individual as opposed to have in the
Speaker 2: business pay. So there's a lot of kind of philosophical
Speaker 2: questions about what could happen and what's a better way
Speaker 2: to do this, And I think it just brings up
Speaker 2: the whole idea that we can't we've not done any
Speaker 2: type of major changes on a property tax system in
Speaker 2: fifty years. Nineteen seventy six was the last time. So
Speaker 2: it just really shows, you know, we've been overdue. And
Speaker 2: last year we've passed five strong bills plus was in
Speaker 2: the budget to really kind of correct what happened. And
Speaker 2: in my mind, we've essentially now said that the frustration
Speaker 2: that voters have, which is their tax bill goes up,
Speaker 2: they never had to say on it, and it's all
Speaker 2: because of the value spiking. Local government is getting unvoted
Speaker 2: windfalls that they just didn't really need. We've essentially stopped
Speaker 2: that moving forward, that will not continue. So voters now
Speaker 2: have a lot more of that control with what levees
Speaker 2: are on the ballot, what do they actually want to
Speaker 2: pay for in support. But you know what percentage of
Speaker 2: levees passed last year in November, Okay, eighty seven percent.
Speaker 2: So despite there being one hundreds of thousand centatures being
Speaker 2: collected a lot of people angry at property taxes, voters
Speaker 2: still approved eighty seven percent of the levees across Ohio.
Speaker 2: And there's a disconnect there. But there's also a thing
Speaker 2: of sense that if you're asked, hey, do you want
Speaker 2: to support your local fire department with this levee for
Speaker 2: a fire truck, typically you're going to say yes. But
Speaker 2: if you're forced to pay over five hundred or one
Speaker 2: thousand dollars more your tax bill and you had no
Speaker 2: say over that, that's when you get really upset, and
Speaker 2: rightfully so, because that shouldn't happen. So we're correcting that
Speaker 2: moving forward.
Speaker 1: He is Ohio represent of David Thomas, and he is
Speaker 1: the foremost expert, the generalist when it comes to this
Speaker 1: property tax You should I'm having them on because they're
Speaker 1: trying to get this on the ballot. A group called
Speaker 1: Abolish Ohio Property Taxes gathering signatures for a constitutional amendment
Speaker 1: in November that would eliminate our property taxes. The problem
Speaker 1: is they're like, well, we don't know how to replace it.
Speaker 1: That's y'all's job at in Columbus. We just don't want
Speaker 1: any more. Property taxes could be as high as twenty
Speaker 1: percent or more the sales tax we pay in Ohio,
Speaker 1: which would be devastating to border cities like Cincinnati, for example.
Speaker 1: We already cut the local government fund I think back
Speaker 1: in twenty thirteen, and that FOS forced local communities to
Speaker 1: engage these levies in the first place. So if you
Speaker 1: push to abolished property taxes now the state with I mean,
Speaker 1: the finish what they started, right, Aren't you just shifting
Speaker 1: the burden rather reducing it.
Speaker 2: That's a great question. I get asked a lot. Your
Speaker 2: state tax dollars pre twenty thirteen per twenty ten used
Speaker 2: to send a ton I think we had eight income
Speaker 2: tax brackets. You just sent a tone down to Columbus,
Speaker 2: and then it was Columbus decided, Okay, who's the winner,
Speaker 2: who's the losers? And how much do local communities get.
Speaker 2: And the philosophy from twenty ten to now has been
Speaker 2: you should be sending a whole lot less to Columbus
Speaker 2: and then you have more money to decide do I
Speaker 2: want to support that fire department or the library or
Speaker 2: whatever local levee. And it's kind of local communities then
Speaker 2: picking what type of services they want versus that money
Speaker 2: going on to Columbus and then hoping to come back.
Speaker 2: Because you're absolutely right, we have cut the little government
Speaker 2: fund that's the money that Columbus sends the local government
Speaker 2: in twenty ten. Now every year since then we've actually
Speaker 2: been increased in that percentage, and now it's not back
Speaker 2: to where it wasn't twenty ten, but it's pretty close. Alver,
Speaker 2: what is absolutely different than is our income tax rate.
Speaker 2: You know, we're now the lowest flat income tax in
Speaker 2: the nation at two point seventy five percent, and then
Speaker 2: we're going to keep decreasing that. So there's there's trade
Speaker 2: oops with that. But in my mind, less to Columbus
Speaker 2: more in your pocket. To the side you might be
Speaker 2: paying more because you're being asked and you want to
Speaker 2: support the local services. I'd rather that money stay there
Speaker 2: than they come down to the Statehouse.
Speaker 1: Yeah, I mean, this is the cost of that local
Speaker 1: money not coming back as well. We have to add
Speaker 1: more and more levees and now we're seeing property tax
Speaker 1: values go up and like and people are now I
Speaker 1: get it, but we we still have to fund government.
Speaker 1: Property tax is fun like sixty five percent of local
Speaker 1: government revenue. So school fire, police, ems. What for you
Speaker 1: were in northeast Ohio, what do you tell your constituents
Speaker 1: if this happens and those things will have to be reduced?
Speaker 1: I mean, which one do you pick? Can you do
Speaker 1: without schools, fire police or ms?
Speaker 2: Well, and that's a great point too, so you know,
Speaker 2: essentially less money from Columbus to local governments. Your comment
Speaker 2: of they've essentially moved over the levees to help make
Speaker 2: the difference up, But that didn't actually have to be
Speaker 2: the case. And my main kind of comments to my constituents,
Speaker 2: especially my local governments, have been we have to change
Speaker 2: that mindset that's always the property owner that we go to. Counties,
Speaker 2: for example, have a sales tax option. Already we actually
Speaker 2: see Montgomery County funding their social services not through property
Speaker 2: taxes but through sales tax, or Washington County actually decreasing
Speaker 2: their township property taxes and making it up in a
Speaker 2: sales tax. That's one option at the county level. And
Speaker 2: obviously cities and villages they should have the lowest property
Speaker 2: taxes in the state because they have the income tax
Speaker 2: locally and that can vary as well. And schools actually
Speaker 2: have an income tax option also, So there's other ways
Speaker 2: to fund our local governments, and we've given different options
Speaker 2: besides just the property needs. Yeah, and you know that's
Speaker 2: one thing now, but then if abolish happens, I would
Speaker 2: envision that kind of tell folks whatever other option that
Speaker 2: community has, city, village, township, county, they'll likely just increase
Speaker 2: and move up tremendously that that tax revery. Now.
Speaker 1: He's represent David Thomas Rep. In the Ashtabulah Warren area,
Speaker 1: and he is a guy who is the foremost expert,
Speaker 1: I would say in General Assembly on property tax because
Speaker 1: we're all sweating right now. We're seeing rates go up
Speaker 1: as high as one hundred and thirty percent here in
Speaker 1: southwest Ohio and a lot of people just screaming stop
Speaker 1: the pain. And there's a group out there that's trying
Speaker 1: to get on the ballot. November just that a constitutional
Speaker 1: amendment that would eliminate Ohio's property tax. But we got
Speaker 1: to pay for fiery ms, school police, all that stuff
Speaker 1: you don't get in your road. We had a rough
Speaker 1: winner here. I know you had a rough winner too,
Speaker 1: especially up north. We got hammer down here in Cincinnati,
Speaker 1: and hey, you know'd be nice if we can get
Speaker 1: some plows out there. That's a question as well. So
Speaker 1: you know, even and you're a Republican. Hamlet County Auditor
Speaker 1: Jessica Miranda is a Democrat, says called I had her
Speaker 1: on on a year or so ago talking about this,
Speaker 1: and she said, it's tax shifting, not tax relief. That
Speaker 1: we keep cutting its obligations to locals from the state
Speaker 1: and it appears to help taxpayers, but it just kicks
Speaker 1: the can down to a different area. It's not really
Speaker 1: it's just tax shifting. It's not like, wow, I got
Speaker 1: my taxes, go hey, this is great. Yeah, but we
Speaker 1: still got to pay for stuff. How do you do that?
Speaker 1: When Democrats and Republicans agree, it sounds like there's impetus
Speaker 1: to maybe make them change.
Speaker 2: Yeah, And that's ultimate question is what level of government
Speaker 2: is actually the largest and what is actual tax reform.
Speaker 2: In my mind, actual tax reform is the taxpayer paying
Speaker 2: less overall, and it's the government getting less than overall.
Speaker 2: And if we continue to essentially promp up and make
Speaker 2: larger one area of government, which would then be for example,
Speaker 2: local government, all that really does is actually hate your
Speaker 2: tax money. It doesn't relieve you or decrease your burden.
Speaker 2: It just actually is increasing and almost promoting larger growth.
Speaker 2: A perfect example of that, I say is the school systems.
Speaker 2: So you've probably heard and everyone says all of the
Speaker 2: state's cutting school funding, the state's cutting school funding. We
Speaker 2: have actually been increasing your tax dollars to public schools
Speaker 2: since twenty twenty, for example, every year almost a billion
Speaker 2: two billion dollars and so tremendous amounts more in taxpayer
Speaker 2: dollars going to local schools. And if that theory were correct,
Speaker 2: that essentially the statements needs to pay more to local governments,
Speaker 2: then our school system should not need as much property
Speaker 2: tax money. But what's actually happened over the last five years,
Speaker 2: as the state has increased school funding tremendously, schools have received,
Speaker 2: asked for taken even more on the property tax side,
Speaker 2: and they're essentially the philosophy that more is never enough,
Speaker 2: and so there has to be some type of limit,
Speaker 2: some type of control over that government size of government spending,
Speaker 2: and that's essentially trying to decrease in taxes.
Speaker 1: And you mentioned school funding there that was ruled on
Speaker 1: constitual health. Well, I think even before I was doing
Speaker 1: talk Raati for goodnessake back in the nineties, and the
Speaker 1: state still has yeah fully implemented fair school funding. So
Speaker 1: if that disappears, that's a whole other crisis there isn't it.
Speaker 2: The ninety seven decision, and that's the Darraf decision. It
Speaker 2: didn't actually say that property taxes were un constitutional for schools,
Speaker 2: or that it was the taxpayer who was being served unduly.
Speaker 2: It was actually more of the student. So we were
Speaker 2: back then essentially giving a whole bunch of money to
Speaker 2: wealthy areas, wealthy school districts and helping them wealthy kids
Speaker 2: versus your poor kids were really being left out. And
Speaker 2: so now what we essentially do. We've had eight different
Speaker 2: funding formulas since nineteen ninety seven, and we kind of
Speaker 2: balance out the playing fields. So your wealthier areas, your
Speaker 2: state tax dollars still go to those schools, but a
Speaker 2: very smaller amount than your poorer areas. Think of in
Speaker 2: my neck of the woods, East Cleveland's Youngstown City schools.
Speaker 2: Those schools receive almost thirty thousand dollars per kid from
Speaker 2: your state tax dollars versus your wealthier school districts, those
Speaker 2: received tremendously less. And that's essentially what that constitutional decision
Speaker 2: said we hadn't moved towards is trying to give an
Speaker 2: equal opportunity for each of his kids, regardless of you know,
Speaker 2: wealthier or poor. But using property taxes or local revenue,
Speaker 2: I think has to be a piece of that school
Speaker 2: funding side. When I tell folks that we spend over
Speaker 2: thirty billion dollars on public schools, their eyes just get
Speaker 2: wide because that that is over a third to almost
Speaker 2: half of our state budget.
Speaker 1: And look at the results we get. That's a separate
Speaker 1: argument entirely. David, Oh, all right, that's insane. So I
Speaker 1: talked to I Want Bill Sites Bill Sites when he
Speaker 1: was in office, he was part of Mike Dwin's working group,
Speaker 1: and they came up with I believe twenty targeted relief recommendations,
Speaker 1: homestead exemptions, deferrals, levy reform, inflation caps. Well, why didn't
Speaker 1: that fix the problem, or why shouldn't have to fix the problem.
Speaker 1: I mean, you put the smartest minds out there. They said, Okay,
Speaker 1: here's the plan, and here we are. Yeah.
Speaker 2: So I joke, I'm the most speech tooled legislator right now.
Speaker 2: A lot of these different reforms were actually in the
Speaker 2: state budget last year. The governor vetoed almost all of
Speaker 2: them and then formed his working group to say, okay,
Speaker 2: what should we do? What if these policies are good?
Speaker 2: Back and bill sites. The working group actually backed up
Speaker 2: most of those policies that were in the budget, and
Speaker 2: then other ones too, So we passed five different bills
Speaker 2: this past year. Those bills essentially stop them voted spikes,
Speaker 2: they give a lot more clarity on the ballot voter control,
Speaker 2: and they actually start decreasing tax bills starting second half
Speaker 2: of this year. So those were essentially the biggest changes
Speaker 2: we've made to the property tax system in fifty years.
Speaker 2: We still have a ton more to do, but we
Speaker 2: actually hit almost half of the recommendations of that study
Speaker 2: committee just last year alone in those five different bills.
Speaker 1: Finally, David should voter listening to this thing, But four
Speaker 1: or against the proposal maybe getting on the belt in November.
Speaker 2: So I don't think that this is the right thing
Speaker 2: to do, and I think that there's a lot of validity,
Speaker 2: and I would not begrudge anyone from voting yes because
Speaker 2: of just how bad the system has gotten. I think
Speaker 2: that we can do a lot of good and a
Speaker 2: lot of changes that does not blow up the system
Speaker 2: and cause us to essentially have to redo everything, because unfortunately,
Speaker 2: there's about a month turnarounds from when folks vote to
Speaker 2: when this happens, and you're talking about the largest change
Speaker 2: in Ohio structure in our history happening in about one month.
Speaker 2: I'd rather do that more planned out, more kind of
Speaker 2: long term, and have those changes actually help an impact
Speaker 2: versus what could happen in that part amount of time.
Speaker 1: Well, we've seen this before. Bus listens with the marijuana thing,
Speaker 1: is that people want something and the legislature doesn't do anything,
Speaker 1: and then they come up with a grassroots effort in
Speaker 1: the legislature steps and so why well, hold on a second,
Speaker 1: that's kind of what's happening here. We'll find out how
Speaker 1: it plays out again. Ohio represent David Thomas up in
Speaker 1: Jefferson and northeast O Hiah, thanks for coming on the
Speaker 1: show this morning. I really appreciate it.
Speaker 2: Oh, thank you so much.
Speaker 1: Be Will it's a Scott's Loan show. Uh yeah, it's like,
Speaker 1: careful what you wish for, you might just get it.
Speaker 1: You know, it's America and we want everyone else to
Speaker 1: pay for what we want. I don't want. I want something,
Speaker 1: but you should pay for it. Welcome to the United States.
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